select
|

More owners sell to downscale and fewer upgrade

Gauteng homeowners are in a fragile financial state and the level of financial distress among households in the province is higher than in the rest of the country.

Estate agents in Gauteng estimated that 22 percent of sellers were downscaling due to financial pressure in the second quarter of this year, which was slightly higher than the 21 percent estimate for the first quarter, according to the latest FNB Gauteng property review.

The estimated percentage of Gauteng homeowners selling to downgrade in the second quarter was also higher than the estimated 20 percent of homeowners countrywide who were selling for this reason, which was unchanged from the first quarter.

Theo Swanepoel, an FNB property analyst, said a second indicator of financial strength was the estimated percentage of sellers selling to upgrade, adding a recent decline in this percentage might be a sign of mildly mounting pressure on the Gauteng home market.

FNB said the estimated percentage of Gauteng homeowners selling to upgrade declined to 13 percent in the second quarter from 19 percent in the first. The percentage of sellers selling nationally to upgrade declined to 15 percent of total sellers in the second quarter from 17 percent in the first.

FNB said these two figures were arguably the most important indicators in its estate agent's survey of the financial pressure and constraints experienced by homeowners.

The bank said the gap between the two had closed significantly since early 2009, but the level of downscaling due to financial pressure was still high.

Swanepoel said the Gauteng residential market had a relatively good run in the summer, but the slowing economy might retard the province's house price growth in the near term.

The FNB Gauteng house price index showed a further acceleration in the year-on-year growth rate to 8.1 percent in the second quarter from 6.9 percent in the previous quarter.

Swanepoel said this reflected a relatively good period for house price growth and was the fifth consecutive quarter of year-on-year growth acceleration. The average price of properties transacted in the Gauteng index was R887 633.

However, Swanepoel said the accelerating price growth trend might be near its peak.

There had been a slowdown in the pace of acceleration in the quarter-on-quarter price growth to 2.4 percent in the second quarter from 2.3 percent in the first after more significant increases in previous quarters. In addition there were signs recently that the economy had been starting to slow down.

This was evident in the Reserve Bank's leading business cycle indicator and in Economists.co.za's Gauteng barometer, which revealed broadly slowing growth after a peak earlier this year.

He said seasonality, with winter in Gauteng typically a slow period, was the dominant driver influencing the near-term expectations in Gauteng.

Although not all factors cited were negative, the negative factors of tight lending criteria and economic stress or pessimism outweighed the positives of relaxed lending and positive sentiment, he said.

(Business Report)


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 24 Nov 2017
      Demand for secure estate living in Hout Bay has risen sharply in recent years, precipitating a spike in development with estate homes now accounting for 20.24% of the property landscape with the launch of an exclusive new gated development on 26 November adding 20 more units to the existing 1250 estate homes.
    • 24 Nov 2017
      There are some things that money can’t buy – spectacular views from Mouille Point to the V&A Waterfront and a trendy and lively neighbourhood that encapsulates the very best of the Cape Town lifestyle.
    • 24 Nov 2017
      Tshwane’s four-bedroom Mayoral mansion, nestled among ambassadorial residences in the upmarket suburb of Muckleneuk, fetched R5.1 million after spirited bidding at High Street Auctions’ final sale of the year.
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
        
    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