select
|

Property sector unaffected by strikes

Heightened socio-political uncertainty has not yet had a noticeable effect on the residential property market, First National Bank (FNB) said on Thursday.

"There appears to be some heightened investor concern regarding South Africa's future stability and prosperity," the bank said in a statement, referring to widespread strikes, service delivery protests, and rating downgrades.

Higher costs of borrowing for South Africa - resulting from rating downgrades or heightened risk perceptions - had the potential to restrict economic growth.

Rand pressure could also increase imported prices, pushing up inflation, which in turn would eat into household disposable income.

It also raised the risk of higher interest rates. All of this would potentially impact on the residential market in an indirect way. However, direct impacts were also possible.

Changes in sentiment prompting more local homeowners to consider emigration and changes in confidence for potential foreign buyers could impact the market directly.

FNB's third-quarter estate agent survey had found little evidence of such direct impacts, the bank said.

The percentage of sellers who put homes on the market in order to emigrate dropped from 4% of total sellers in the second quarter to 3% in the third quarter.

This was the lowest emigration selling percentage estimated since 2008.

Based on a two-quarter moving average, the third quarter did show foreign buyers declined to only 3% of residential property, following a prior improvement to around 4%.

"As yet, though, we would not draw any hard and fast conclusions based on one quarter's data, but it is something to watch," FNB said.

Weak global economic conditions probably masked a change in sentiment towards South Africa.

Job prospects in traditionally popular emigration destinations were far from rosy.

In addition, times were tough in economies such as Europe and the United Kingdom, which could put pressure on foreign buying.

"In short, therefore, with regard to emigration [and] selling of local property we do not appear to be seeing any negative impact from recently heightened domestic tensions," FNB said.

But in better economic times, the negative impact might have been different.

Foreign buyers from African countries did not appear to have been affected by recent tensions.

This group had increased to 21% of total foreign buyers for the previous two quarters.

"This continues an upward trend in this percentage from a low of 8.5% back in the third quarter of 2010," FNB said.

South Africa was likely to see further increase in this percentage as Africa's economic fortunes continued to improve.

(Fin24)



  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    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