News24
10 Sep 2019, 11:44 GMT+10
After weak house price growth in the first half of 2019, there are signs that the prices may be stabilising, FNB has said, in a new analysis of the residential property market.
A number of factors are supporting prices:
Demand is improving
Improvements in demand can be attributed to some easing in buyer despondency following the elections, the increased bargain hunting given the attractive pricing, more competition between lenders as well as lower interest rates, says FNB.
This is reflected in the steady growth in mortgage extension, which has averaged 4.3% in the year to date, compared to 3.4% in the same period last year.
In fact, for the first time since June 2011, mortgage advances have been growing faster than the average house price growth in South Africa since the beginning of the year.
"Except for the brief period in the beginning of 2018 ('Ramaphoria'), we have not seen mortgage lending outpacing house prices since June 2011," FNB said in a release.
This has contributed to a 0.9% increase in transaction volumes this year, compared to 2018.
Supply is slowing
The FNB Market Strength indices show a "persistently slowing pace" in properties put on the market.
"The slowing pace of supply is driven by sellers withdrawing their properties, amid tough selling conditions, as it is becoming increasingly difficult to attain asking prices. This is countered somewhat by the surge in the supply of new stock (particularly flats and townhouses), as well as the rising emigration-related sales," FNB says.
Fewer properties in the market, combined with stronger demand, should push prices higher.
Interest rates
FNB expects that the SA Reserve Bank will cut rates by another 25 basis points before the end of the year, which should lend support.
Outlook
FNB expects that house prices will increase by 3.5% this year, and by 4% next year.
The eThekwini metro continues to overperform, supported by new developments in the North Coast regions, as well as renewed interest in the city centre, says FNB. In the inland regions, Ekurhuleni appears to have bucked the generally slowing price trend at a national level, while Johannesburg and Tshwane remain in the low single-digit territory.
However, Tshwane properties remain in the market for the shortest periods before they are sold:
Get a daily dose of Kolkata Sun news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Kolkata Sun.
More InformationIn the past month alone, 23 Israeli soldiers have been killed in Gaza—three more than the number of remaining living hostages held...
LONDON, U.K.: At least 13 people are believed to have taken their own lives as a result of the U.K.'s Post Office scandal, in which...
WASHINGTON, D.C.: Travelers at U.S. airports will no longer need to remove their shoes during security screenings, Department of Homeland...
WASHINGTON, D.C.: An elaborate impersonation scheme involving artificial intelligence targeted senior U.S. and foreign officials in...
SLUBICE, Poland: Poland reinstated border controls with Germany and Lithuania on July 7, following Germany's earlier reintroduction...
WASHINGTON, D.C.: After months of warnings from former federal officials and weather experts, the deadly flash floods that struck the...
RIO DE JANEIRO, Brazil: At a two-day summit over the weekend, the BRICS bloc of emerging economies issued a joint declaration condemning...
DHARAMSHALA, India: The Dalai Lama turned 90 on July 6, celebrated by thousands of followers in the Himalayan town of Dharamshala,...
PARIS, France: French military and intelligence officials have accused China of orchestrating a covert campaign to damage the reputation...
NEW DELHI, India: Birkenstock is stepping up its efforts to protect its iconic sandals in India, as local legal representatives conducted...
The Hague [Netherlands], July 11 (ANI): Italy made history after securing qualification for the 2026 Men's T20 World Cup in India and...
New Delhi [India], July 11 (ANI): It was a moment of pride for legendary actor Anupam Kher, Boman Irani and the entire team of 'Tanvi...