Property News

Estate Agents’ perceptions reveal stabilizing property market

The FNB Estate Agents Survey results for the first quarter of 2019 shed some light on the current market activity and sentiment on the ground. FNB summarizes some of the key takeaways below.

Estate agents did not perceive further slowing in housing demand in the first quarter of 2019. Their average estimate for “serious viewers per show house prior to sale” was 9.97 viewers per show house, virtually the same as the estimate of the prior quarter. This, however, still languishes behind the historical average of 11.95 viewers since 4Q06.

In addition, agents did not perceive a further weakening in the balance between demand and supply in the first-quarter survey. The average time of homes on the market moved sideways at fifteen weeks and three days from fifteen weeks and six days in the fourth quarter of 2018, putting a break on a broadly rising trend since the end of 2015. This is significantly lower than the most recent peak of seventeen weeks and six days in the third quarter of 2018.

Notwithstanding, this suggests that current demand levels are still insufficient to mop up available supply of housing stock on the market, when compared to the long-term average of thirteen weeks and four days (since inception of the survey question in 4Q04).

The view of a persistent supply-demand imbalance (in favour of buyers) was supported by a marginal rise in the percentage of sellers having to drop their asking price to strike a deal. Such sales accounted for 95.3% of all sales, up from 94.3% in the fourth quarter of 2018. The average price drop, however, appears to have stabilised around -9.4%, virtually unchanged from the previous quarter and still above the historical average of -9.0% since 2010. This imbalance is more pronounced in the coastal areas and in the high-net-worth segments (properties valued at R3.6 million or more), with an estimated 97.3% and 100% of properties selling at below asking price, respectively.

Nevertheless, agents perceived market activity to have picked up in first quarter of 2019, the second successive quarter of improvement. The agents’ Residential Activity rating (scale of 1 to 10) registered 5.85 from 5.27 at the end of 2018, consistent with a slight reduction in the time that a property is on the market.

Source: Propertywheel.co.za | https://propertywheel.co.za/2019/04/estate-agents-perceptions-reveal-stabilizing-property-market/

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