select
|

FNB Property Barometer - Residential Maintenance and Upgrades

The Home Maintenance and Upgrades market remains vastly improved from 2008/9 levels, and as at the 2nd quarter of 2015 it appeared to remain on its steady strengthening path which it has been on since around 2013.

According to the FNB Estate Agents Survey, agents do perceive a very slight increase in the “only attending to basic maintenance” category, but it is too little and too early to be of concern. More significant is their perception of further increase in the top level of home investment, namely “value adding upgrades”, along with further increase in the top 2 levels combined, namely “value adding upgrades” and “maintaining and making some improvements”. This keeps the overall Home Investment Confidence Indicator rising.

Given what has recently happened to consumer confidence, though, near term trends in home investment will be interesting to watch. The FNB-BER Consumer Confidence Index for the 2nd quarter of 2015 dropped to its lowest levels in around 15 years, and this could signal a more cautious approach to consumer spending levels in general.

In addition, we expect interest rate hiking to resume in the near term as CPI inflation accelerates back up to near to the SARB upper target limit.

When tougher financial times arrive, due either to a weak economy or rising interest rates, Home maintenance and upgrades are often deferred to a later date, as more pressing expenditure pressures take preference.

All of this could possibly mean that the upward trend in home maintenance and upgrade levels could slow, or come to an end, later in 2015. So far so good, though. The situation continues to appear healthy, with good levels of maintenance, significant upgrades, and not a lot of speculative activity.

The Home Maintenance and Upgrades market remains vastly improved from 2008/9 levels, and as at the 2nd quarter of 2015 it appeared to remain on its steady strengthening path which it has been on since around 2013.

Agents do perceive a very slight increase in the “only attending to basic maintenance” category, but it is too little and too early to be of concern. More significant is their perception of further increase in the top level of home investment, namely “value adding upgrades”, along with further increase in the top 2 levels combined, namely “value adding upgrades” and “maintaining  and making some improvements”. This keeps the overall Home Investment Confidence Indicator rising.

Given what has recently happened to consumer confidence, though, near term trends in home investment will be interesting to watch. The FNB-BER Consumer Confidence Index for the 2nd quarter of 2015 dropped to its lowest levels in around 15 years, and this could signal a more cautious approach to consumer spending levels in general.

In addition, we expect interest rate hiking to resume in the near term as CPI inflation accelerates back up to near to the SARB upper target limit.

When tougher financial times arrive, due either to a weak economy or rising interest rates, Home maintenance and upgrades are often deferred to a later date, as more pressing expenditure pressures take preference.

All of this could possibly mean that the upward trend in home maintenance and upgrade levels could slow, or come to an end, later in 2015. So far so good, though. The situation continues to appear healthy, with good levels of maintenance, significant upgrades, and not a lot of speculative activity.

Read the full report


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 20 Apr 2018
      Whenever changes in the political ecosystem of a traditional property market create uncertainty, smart investors begin to look elsewhere for new opportunities. Property experts at IP Global have analysed the trends and crunched the numbers to find new markets to explore in Europe and the United States.
    • 20 Apr 2018
      Energy and water self-sufficiency are increasingly important factors in home buyers’ choice of property – especially in Cape Town where the extreme drought of the past few years has made municipal supply costly as well as uncertain.
    • 19 Apr 2018
      During the last decade, rampant development has progressively transformed Cape Town’s property landscape with densification being the order of the day, but there are still one or two hidden gems like Scarborough which have retained their original character, offering an inimitable lifestyle and an attractive investment opportunity.
    • 19 Apr 2018
      The rental market is a cut-throat sector of the real estate market that waits for nobody. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, first-time renters need to be fully prepared before they even start the process of looking for a place to rent in order to avoid the disappointment of losing out on their ideal property.
    • 19 Apr 2018
      Choosing to buy your first home instead of continuing to rent is a big decision that will usually take some time to put into action, but the sooner you can save up a sizeable deposit, the closer you will be to reaching your goal.
    • 18 Apr 2018
      Selling your home is no small task and as you will quickly find out, there are a lot of misconceptions about the process. Gerhard van der Linde, Seeff's MD in Pretoria East lists the top 5 misconceptions when you are selling your home.
    • 18 Apr 2018
      The Cape Town municipality is now installing water-management devices at properties that have been non-compliant with the new level 5 water restrictions and there are talks of fines between R5,000 and R10,000 for households that use too much water.
    • 17 Apr 2018
      The recent interest rate cut has stoked the coals in the first-time buyer’s market. At least for the next two months until the next interest rate announcement, homeowners are guaranteed lower monthly instalments than in the previous quarter. But, is it wise to take out a 100% bond just to enter the property market while interest rates are low?
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK