Finance

These are the major metros in SA under the most financial stress

Staff Writer

 ·15 Jul 2016

The multi-year stagnation in South Africa’s economy continues to suppress consumer confidence, and this in turn appears to have led to a more cautious household sector, according to financial services company FNB.

This caution is most visible in the percentage of sellers selling in order to upgrade homes, the company said, and points to mounting financial limits, and increased household caution.

However, according to FNB’s Home Selling Estate Agent Survey, there has only been a minor rise in financial stress-related home selling to date.

The estimated percentage of sellers “selling in order to downscale due to financial pressure” was 14% in the 2nd quarter of 2016, up from the 11% low of three quarters prior – 3rd quarter of 2015.

Examining the Estate Agent Survey by major metro region, the City of Cape Town would appear to be the city whose households are showing the most financial strength, the report said.

Sellers Selling to Downscale due to Financial Pressure – % of Total Selling

• Nelson Mandela Bay – 16%
• Ethekwini – 16%
• Joburg – 14%
• Tshwane – 11%
• Cape Town – 11%

“For the first two quarters of 2016, we saw the City of Cape Town’s estimated percentage of sellers selling in order to upgrade record 15%.

“This is the highest of the major South African Metros, with Nelson Mandela Bay at 10% being the lowest,” said property sector strategist at FNB, John Loos.

Sellers Selling in order to Upgrade – % of Total Selling

• Cape Town – 15%
• Ethekwini – 12%
• Tshwane – 12%
• Joburg – 11%
• Nelson Mandela Bay – 10%

Simultaneously, Cape Town, along with Tshwane, had the lowest estimate for sellers selling in order to downscale due to financial pressure, i.e. 11%. Nelson Mandela Bay recorded 16%, the highest estimate on this category of home selling.

“Therefore, in terms of financial strength of regional household sectors over the past two quarters, Cape Town would appear to be in the strongest position, and Nelson Mandela Bay in the weakest position.” Loos said.

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