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From The Chairman - Some Signs of Stability, but Market Outlook Remains Largely Flat
After some volatility during the early part of the year, it seems that a level of stability is returning to the market, as reported by the banks. Agents are also feeling more positive about the remainder of the year.
Heading out of a slow winter, we look forward to the onset of the warmer summer months which is traditionally a busier period for most areas. We hope that buyers will now start taking advantage of the favourable market conditions.
Looking back over the first half of the year, we observe a market which has performed largely flat with only sideways movement. The national house price, while edging up marginally to 3.5% by mid-year still sits somewhat below the CPI which dipped to 4% in July, from a previous 4.5%.
While the lower price bands to around R935,000 continue seeing better growth, generally in the 4%-8% range while the upper end of the market remains under pressure with FNB reporting growth of just 0.8% above R2.3 million. Many of the top-end luxury areas are now seeing a decline in selling prices achieved.
The average time that it takes to sell a property has improved to around 14 weeks (from 15 weeks late last year) but is still below the market average of around 12 weeks.
Residential buying dominates the market while investment buying remains at low levels. Buy-to-let is example averaged just 6.8% of total sales for the first half of the year, notably down from 9.7% in 2Q17. The coastal areas (Cape Town and Durban) has seen some recovery to around 10% while the inland areas (Johannesburg and Pretoria) have declined to around 5%.
Although most sellers are selling due to a change in lifestyle, there has been an uptick in financial related selling as well as due to emigration.
While the positive mortgage lending landscape and lower borrowing costs are expected to provide a boost for the market, the Seeff Group continues to see the outlook as fairly flat for the year. It will remain favourable for buyers while sellers will have to continue keeping their asking prices in check.
If you are selling and your property is not attracting offers, you may just want to chat to your agent to revise your asking price to ensure that your property is competitively priced in this market.
"Home is our story, so be sure to start your next chapter with us." - Samuel Seeff
Feel free to contact Seeff Napier today to find out more.