Sellers take much longer to offload properties, take bigger discounts,
but estate agents are feeling more positive - barometer in a nutshell.
Not so long ago, properties were being snapped up within weeks and even
days of being advertised to the market. But these days, it is taking an
average of more than five months to sell residential real estate.
This was one of the trends to emerge in the latest FNB Property
Barometer, a survey that gauges sentiment and other factors among estate
agents.
Issues highlighted when the survey results were released in Johannesburg
on Monday include that:
* Fewer people are receiving asking price from buyers, with the
number of sellers accepting discounts increasing from 85% to 88%,
when comparing the second and third quarters of the year;
* It took an average of 14 weeks and six days to sell property,
reported estate agents in the second quarter; now, though, the
average selling time is 20 weeks and one day;
* There were fewer residential investors (12%) buying properties
last quarter compared to the second quarter (14%);
* One in five sellers cite emigration as the reason for offloading
their properties - a figure that has been rising this year;
* One in four sellers cite financial constraints as the reason for
putting their homes on the market - also a higher figure than the
previous quarter;
* There's an increase in the number of investment properties that
are being returned to the market without making a profit for their
owners - and even a loss; and
* Downscaling because of financial pressures appears to be more
marked in KwaZulu-Natal and the Western Cape than Gauteng.
Although this has been a tough year for estate agents, and most were
decidedly glum about business prospects in the second quarter, sentiment
has shown a marked improvement.
According to FNB, 15% of agents surveyed in the previous quarter
expected things to improve but 48% are now more positive.
FNB Home Loans' property strategist John Loos said it is possibly the
August SA Reserve Bank decision to leave interest rates on hold that
added a boost to sentiment in this latest survey.
Unrealistic price setting by sellers was contributing to the increased
time on the market, surmised FNB, while the disappearance of buy-to-let
investors was attributed to the low yields on offer.
There are also fewer first-time buyers (down from 17% to 12%), a sign
that affordability has helped put a lid on sales volumes and prices.
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