How long it takes to sell a home in Joburg, Cape Town and other major cities right now
FNB’s latest estate agent survey shows a noticeable shortening in the average time of homes on the market – pointing to a local housing market possibly starting to strengthen in terms of housing demand relative to supply.
However, a regional breakdown points to very different housing markets.
The strongest major regional markets appear to be found in Gauteng, most notably the Tshwane Metro region, which has by far the lowest average time of homes on the market of late, the lender said.
By comparison, the three coastal major metros are relatively weak, especially Ethekwini and Nelson Mandela Bay, while the once strong City of Cape Town also appears to have cooled off, FNB said.
It noted that some of the decline in the average time of homes on the market is likely to be seasonal, given that the first quarter is typically a strong seasonal quarter for home buying.
However, it added that there has been a significant improvement in national sentiment, which appears to have been strongly driven by political leadership change in the country late in 2017 and early this year.
“This wave of relative ‘euphoria’ can only be sustained should it be backed up by meaningful policy and delivery change aimed at placing SA on a higher economic growth path,” said property strategist at FNB, John Loos.
“For the time being, however, the residential market has showed strengthening signs early in 2018, but with the strengthening largely being a Gauteng Province story, and with Tshwane Metro appearing to be the major metro with the strongest demand-supply ‘fundamentals’.”
Gauteng appears far closer to market equilibrium (around 12 weeks) than the three major coastal metros combined, FNB said.
“Whereas Gauteng’s estimated average time of homes on the market was 11 weeks and five days in the first quarter of 2018, the aggregated coastal metro estimated was a far longer 17 weeks and six days,” Loos said.
To boost survey sample size when breaking down the survey into more detailed major metro regions (to reduce volatility), FNB noted that it used a two-quarter moving average.
Using this two-quarter average at a metro level, the three coastal cities (Cape Town, Ethekwini and Nelson Mandela Bay) have been weaker than the major Gauteng regions.
“Cape Town, the best of the Coastal Metro regions averaged 15.21 weeks on the market for the two summer 2017/18 quarters, Nelson Mandela Bay 22.07 weeks, and Ethekwini 20.64 weeks,” FNB said.
“By comparison, Greater Joburg (City of Joburg and Ekurhuleni Metros) has averaged a healthier 14.93 weeks and Tshwane Metro an even more impressive 10.64 weeks for the same two quarters.”
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