The sectional title house market still showed a better average house price growth compared to the full title market in 2017, but the price growth gap between the two segments has diminished, according to new data from FNB.
The sectional title house price index rose by 5.18% year-on-year in the 4th quarter of 2017, having accelerated from 4.96% in the first quarter of the year. The full title house price index, by comparison, showed a slower 3.95% year-on-year growth rate in the fourth quarter of 2017.
Within the sectional title segment, “smaller was still better” in the fourth quarter of 2017 when one compares the relative strength of the various sub-segments’ price growth, said property strategist John Loos.
The smallest sized sectional title sub-segment, namely the “less than 2 bedroom” segment, showed the strongest price inflation to the tune of 7.3% in the 4fourth quarter of 2017. Then came the 2 Bedroom sub-segment with 6.4% price growth, while the largest “3 bedroom and more” category was the slowest sub-segment with 3.6% average price growth.
However, it was the 2 Bedroom Sub-Segment that was the only one of the 3 to be showing house price growth acceleration through 2017, from 4.9% in the final quarter of 2016 to 6.4% by the end of 2017, the other 2 sub-segments showing slowing price growth through the year.
In the full title segment, the 3 bedroom segment has shown the highest average price growth of the 3 sub-segments, to the tune of 4.2% year-on-year in the fourth quarter of 2017.
The 4 bedroom and more full title segment saw a slower growth rate of 3.7%, while the smallest sized 2 bedroom-and-less segment was the weakest with 3.3%.
Average price by major full title segment
|Full Title Average Price||R1 093 590||R1 149 616||R1 189 453||R1 207 773|
|2 Bedrooms and fewer||R601 037||R640 736||R658 645||R667 811|
|3 Bedrooms||R1 107 127||R1 164 908||R1 208 484||R1 226 782|
|4 Bedrooms and more||R1 724 817||R1 776 845||R1 831 652||R1 860 795|
Average price by major sectional title segment
|Full Title Average Price||R815 463||R875 988||R924 796||R988 626|
|Less than 2 Bedrooms||R637 723||R712 314||R772 213||R789 523|
|2 Bedrooms||R766 827||R809 616||R855 724||R876 386|
|3 Bedrooms and more||R1 158 774||R1 213 531||R1 262 171||R1 277 825|
Sectional title by square metre
|Sectional Title Average (R/sqm)||R9 780||R10 499||R11 209||R11 484|
|Less than 2 Bedrooms (R/sqm)||R12 277||R13 819||R15 255||R15 749|
|2 Bedrooms (R/sqm)||R9 781||R10 413||R11 096||R11 391|
|3 Bedrooms and More(R/sqm)||R8 660||R9 108||R9 474||R9 600|
The top performer has been the sectional title less than 2 bedroom segment, with cumulative average price inflation of 496.89% from the firt quarter of 2001 to the fourth quarter of 2017.
“This far outstrips the second placed sectional title 2 bedroom segment’s 376.36% and the sectional title 3 bedroom and more segment’s 352.98%. The 3 full title segments have underperformed, the more popular 3 bedroom segment’s 331.41% neck and neck with the 4 bedroom and more segment’s 336.71%, but outstripping the far more affordable 2 bedrooms and less segment’s 284.46%,” Loos said.
Looking ahead, FNB said that the pattern of smaller-sized unit segments outperforming the larger ones is becoming less clear as of late. “In the full title segment, the smallest average sized segment, the 2-bedroon and less segment has recently shown the slowest growth in the main full title sub-segments, while in the sectional title segment it is the mid-sized 2-Bedroom sub-segment which has been the only one recently showing average house price growth acceleration.
“It may be that, after some years of smaller sized sub-segments outperforming the larger ones in terms of price growth, larger sized home now begin to offer relatively better value for money, which could mean that in 2018 we don’t smaller segments clearly outperforming on price growth,” Loos said.