News24
10 Sep 2019, 16:14 GMT+10
After weak house price growth in the first half of 2019, there are signs that the prices may be stabilising, FNB has said, in a new analysis of the residential property market.
A number of factors are supporting prices:
Demand is improving
Improvements in demand can be attributed to some easing in buyer despondency following the elections, the increased bargain hunting given the attractive pricing, more competition between lenders as well as lower interest rates, says FNB.
This is reflected in the steady growth in mortgage extension, which has averaged 4.3% in the year to date, compared to 3.4% in the same period last year.
In fact, for the first time since June 2011, mortgage advances have been growing faster than the average house price growth in South Africa since the beginning of the year.
"Except for the brief period in the beginning of 2018 ('Ramaphoria'), we have not seen mortgage lending outpacing house prices since June 2011," FNB said in a release.
This has contributed to a 0.9% increase in transaction volumes this year, compared to 2018.
Supply is slowing
The FNB Market Strength indices show a "persistently slowing pace" in properties put on the market.
"The slowing pace of supply is driven by sellers withdrawing their properties, amid tough selling conditions, as it is becoming increasingly difficult to attain asking prices. This is countered somewhat by the surge in the supply of new stock (particularly flats and townhouses), as well as the rising emigration-related sales," FNB says.
Fewer properties in the market, combined with stronger demand, should push prices higher.
Interest rates
FNB expects that the SA Reserve Bank will cut rates by another 25 basis points before the end of the year, which should lend support.
Outlook
FNB expects that house prices will increase by 3.5% this year, and by 4% next year.
The eThekwini metro continues to overperform, supported by new developments in the North Coast regions, as well as renewed interest in the city centre, says FNB. In the inland regions, Ekurhuleni appears to have bucked the generally slowing price trend at a national level, while Johannesburg and Tshwane remain in the low single-digit territory.
However, Tshwane properties remain in the market for the shortest periods before they are sold:
Get a daily dose of Iraq Sun news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Iraq Sun.
More InformationTEHRAN (Tasnim) - China Friday said it had taken 'reciprocal' measures against US diplomats in the country, who will have ...
HYDERABAD, India - Four men accused of the rape and murder of a 27-year old woman veterinarian in Hyderabad, India ...
Canada recently voted at the United Nations for the establishment of a Palestinian state. At the same time, Canada reiterated ...
APIA, SAMOA, Pacific Ocean - UN teams are on the ground in Samoa as the country combats a deadly measles ...
PORTLAND, Oregon - Like many Americans, Aaron Cole and his wife had been able to save up a nest egg ...
MELBOURNE, Victoria, Australia - Three people have been charged in relation to Australia's largest ever onshore methamphetamine seizure, worth more ...
Canada recently voted at the United Nations for the establishment of a Palestinian state. At the same time, Canada reiterated ...
Editor's note: We want you to know what's happening, and why and how it could impact your life, family or ...
The United States has imposed sanctions on three Iranian-linked Iraqi militia leaders for allegedly assisting the violent repression on protests ...
When Souzda fled the deadly shelling in Afrin in northern Syria, she thought she was leaving behind more than just ...
Islamabad [Pakistan], Dec 6 (ANI): Usman Khan, the terrorist, who killed two persons in a knife rampage at London Bridge, ...
Belle Ombre - Calum Hill of Scotland weathered the heat and humidity at Heritage Golf Club on Friday to card ...