Although the economy and property market is showing improvement, it is still very much buyers market as the positive sentiment has not yet translated into a meaningful increase in sales and prices, says chairman of the Seeff Property Group Samuel Seeff.
Notably consumers have had to absorb the effects of VAT and other indirect tax increases, recent petrol price hikes and land reform uncertainty, he said.
“While Absa and FNB property barometers point to improvement ahead, they still tell the story of a flat market which largely favours buyers.
“Recovery is usually first felt in the primary urban Gauteng (Johannesburg/Pretoria) areas and thereafter in the coastal and other inland metros. This seems to be what we are beginning to see from the latest property market data.
“On the upside, the banks are granting more home loans and with the recent interest rate drop, it is a good time to buy property,” he said.
According to Seeff, the current average time that a property remains on the market in South Africa is just over 14 weeks.
The group’s data shows that Gauteng areas such as Johannesburg and Ekurhuleni are doing well at around 12-15 weeks, while it takes an average of just 11 weeks to sell a property in Pretoria.
The average for Cape Town is at around 15 weeks – but this is longer for upper end areas, said Seeff.
Durban (Ethekwini) and Port Elizabeth (Nelson Mandela Bay) still lag notably behind at 21-22 weeks.
“Over 90% of all sellers still need to drop their price to conclude a sale while house prices remain under pressure,” Seeff. said.
“According to FNB, the national house price growth is down to just 2.6% for the first quarter, from 5% at the end of last year. The Western Cape in particular faced the double challenge of a decline in semigration buying and the water crisis which has had a drastic downward effect with price growth slowing to just 1.5%.|
“We remain upbeat about the year ahead and the sentiment and economic improvements filtering through and are encouraged by the steps taken by President Cyril Ramaphosa such as the new foreign investment drive which economists predict could be a major boost for economic growth.
“The property market is a factor of the economy and we usually see a lag in improvement. That said, if you are looking to buy or invest in property, you would not want to leave it too late, because once the market takes off so too will the prices, he said.