Estate agents point to a slowing in residential activity levels

According to the latest FNB Estate Agent Survey, residential activity ratings not only points to a near term slowing in the residential market. It also suggests further slowing in the economy too, thus keeping recession risk at high levels.

The residential property market is very much a leading sector of the economy, or at least the existing home market is.  Trend changes in residential activity are highly sensitive to changes in the economic environment, and can even lead some of the most leading business cycle  indicators.

Of FNB’s suite of indicators, our FNB Estate Agent Survey is arguably the most appropriate leading indicator, and it would appear to suggest that the economy’s growth rate is set to get worse in the near term, keeping recession risk at high levels.

In the 4th quarter 2015 FNB Estate Agent Survey, their sample of estate agents surveyed point to a further slowing in activity levels in the residential market. The market still remains “comfortable” and well-balanced, and some of the limits of activity are due to supply (stock) constraints rather than demand constraints. But one we would expect that demand-side weakening would be playing an increasing role of late, and being something of a “leading” sector of the economy this activity rating is possibly pointing to further economic growth weakening in the near term.

While activity levels are still fairly solid, it is the indicator’s direction that is of concern. The Activity Rating’s year-on-year growth rate has slid from a +12.18% positive growth “high” in the 3rd quarter of 2014 to a -8.93% year-on-year decline by the 4th quarter of 2015.

This decline is not merely of concern from a Residential Property Sector point of view. It is of concern because of what it may be signaling in terms of the near term trend in South Africa’s economic growth performance, which is already weak. Real Economic Growth was a mere 1% year-on-year in the 3rd quarter, a rate which is insufficient to promote any significant job creation, and more likely to cause net job loss.

In short, while the Residential Market is still a little way off from being seen as “weak”, the direction of the Residential Activity Rating does point to estate agents as a group experiencing the mounting pressures on the South African economy’s growth.

Find the full report here: FNB Property Barometer - Estate Agent Survey

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 23 Jan 2018
      Many people only start thinking about home-ownership when they are ready to “settle down” or start a family, which is why first-time buyers these days are generally in their mid-30s, compared to those in the previous generation who were usually in their mid-20s.
    • 22 Jan 2018
      Moving away from the city to a country or coastal town and a slower-paced life is a frequent new-year resolution for South Africans, but thorough research should be done before you break free from the hustle and bustle, because making the wrong move could turn out to be a very expensive mistake, and even more stressful for you and your family than staying in the “big smoke”.
    • 22 Jan 2018
      Cape Town is home to many breathtaking and historic homes, but House Invermark designed in 1969 by South African architect Gilbert Colyn, with inspiration from two modernist icons: the Glass House by Phillip Johnson and Farnsworth House by Ludwig Mies van der Rohe is in a class of its own.
    • 22 Jan 2018
      2017 was a challenging year for the South African property market in general, despite small pockets of thriving activity in areas like the Western Cape. As we head into 2018, Tony Clarke, Managing Director of the Rawson Property Group, casts his eye forward to property trends and market influences that could make their impact felt in the New Year.
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us