SA property market 2016 wrap-up
Tough economic conditions and socio-political challenges have no doubt affected South Africa’s residential property market this year, with signs that it is losing momentum - but nevertheless the market has remained “extraordinarily resilient”, especially in certain pockets around the country.
This is the word from Dr Andrew Golding, Chief Executive of the Pam Golding Property (PGP) group, who says the strength of the housing market can be attributed to the “continued vibrancy of the country’s major metro areas coupled with an ever-growing preference for property as an asset class at a time of extreme financial market volatility”.
Average South African house price inflation, according to the Pam Golding Residential Property Index, was 5.5% in 2015 and reached a cyclical high of 5.7% in March 2016, but now “appears to be slowing”, says Dr Golding.
'Bargain' property could cost you dearly - read this
According to the National Credit Regulator, more than 10 million South Africans are having trouble paying their bills at the moment, and many of the property owners among them are selling now in order to pay off some debt or cut back on their monthly expenses.
“In fact, the latest FNB Property Barometer shows that at least 14%, or about one in every seven, of all residential sales currently are being driven by owners selling to relieve financial pressure on their households,” says Berry Everitt, CEO of the Chas Everitt International property group.
“And this is helping to create a classic ‘buyers’ market’ in most parts of the country, with an increasing supply of stock and excellent opportunities for home buyers and investors to acquire properties at highly competitive prices.”
Why sectional title property will continue to boom in SA
Data released by FNB in its latest Property Barometer explains that the volume and value of sectional title transactions have significantly increased since 2010 after the dip in the 2008/9 recession.
“What is even more remarkable is that FNB states that sectional title transaction volumes have risen to 29.94% of total property transactions by individuals by the 3rd quarter of 2016,” says Richard Gray, Harcourts Africa Chief Executive Officer.
“We've monitored and predicted this trend for some time now, as South African buyers have shown a marked interest in sectional title homes.”
Gray says there are many factors that influence why the sectional title market is stronger than the full title landscape at present.
Two essential qualities of top-performing estate agents
Selling or buying a property is one of the most important transactions most people will make in a lifetime, so finding the right agent to handle it is essential.
“The choice of the ‘right’ estate agent is about more than following reputations, important as that is. Acting as an agent is very much about forging and maintaining relationships, and however well regarded an agent is, the quality of service will depend on how well he or she can match the client’s personal needs,” says Richard Gray, Chief Executive Officer of Harcourts Africa.
Deadline for sectional title compliance fast approaching
With sectional title sales accounting for a growing percentage of South Africa’s total home sales, rising from 22% in 2010 to 28.4% of total sales in early-2016, there are no signs of this trend abating, particularly as densification and the demand for convenient apartment living continues.
“Coupled with a growing trend towards urban living in proximity to the workplace and all amenities, the lifestyle advantages of lock-up and go sectional title living are driving the rising demand for such properties, with their added benefits of security and hassle-free maintenance,” says Basil Moraitis, Pam Golding Properties area principal in the Cape’s Atlantic Seaboard and City Bowl.
“As a result of the growing popularity of sectional title, the recently introduced updated legislation regarding sectional title schemes is of relevance to both existing and potential home buyers.”
Home staging - faster sale and better price
Although home staging is not new to the real estate market, its popularity among sellers has seen an increase in recent years.
According to Adrian Goslett, Regional Director and CEO of RE/MAX, more and more sellers understand the importance of creating buyer appeal in today’s challenging market. He says momentum in the property market has shifted towards buyers, so sellers need to optimise their chances of standing out from the crowd.
“Preparing the home for sale can have a positive impact on prospective buyers’ perceptions of the property, and home staging is just one tool that sellers can use to accomplish this,” says Goslett.
“The primary goal for most sellers is to sell their home within the shortest time, for the highest possible price. If sellers want to be able to achieve this, they will need to ensure that their home appeals to the highest number of potential buyers in the market.”