Distressed property sales still high
Distressed property sales have declined significantly since the peak in 2009, but are still too high, according to property analysts and estate agents.
Mortgage originator BetterBond said independent statistics provided by Lightstone Risk Management revealed that the number of distressed residential property sales had declined steadily from 5 865 in 2009 to 4 119 in 2010 and 2 226 last year.
John Loos, a property and household sector strategist at FNB, said yesterday its most recent estate agent survey revealed that selling to downscale due to financial pressure was at 20 percent in the first quarter of this year, compared with 34 percent in 2009.
Loos said this trend had remained fairly stable during the past two years but it was still at a high level and there was still a lot of underlying financial pressure on households, which was masked by low interest rates.
Loos said FNB's non-performing loans had been reduced but were "still too high".
He believed increased operating costs associated with home ownership because of steep increases in electricity and municipal rates tariffs had contributed to the financial pressure on households, together with the rising cost of high frequency purchases, such as petrol and food prices.
Stuart Manning, the chief executive of Seeff, said continued economic constraints and basic cost hikes meant a third of the housing market was still in distress.