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Friday Apr 13, 2012

Gauteng estate agents more optimistic than others

Gauteng estate agents are more optimistic than those in the rest of the country, according to the latest FNB Gauteng Estate Agent Survey released on Thursday.

"The first quarter 2012 survey shows Gauteng estate agents to be currently the most optimistic of the major metropolitan regions," Petro van Heerden, FNB valuations manager, said in a statement.

The survey, compiled in February, found estate agents had a mildly more positive view nationally of the domestic residential property market.

This was largely due to the significant improvement in the market perceptions of Gauteng estate agents.

"By comparison, the coastal metro regions' agents remained more subdued," Van Heerden said.

A sample of estate agents based mainly in the country's major metropolitan areas, were asked about their perception of residential demand in their areas.

They ranked demand on a scale of one to 10, with 10 being the strongest level of demand.

In the first quarter, this demand activity indicator for Gauteng had risen significantly to 6.51 from the previous quarter's 5.86.

"By comparison, the combined coastal regions' demand activity indicator was almost unchanged at 5.39 in the first quarter from 5.38 in the previous quarter."

Van Heerden warned though that the first quarter was generally a seasonally strong period.

"But the difference between Gauteng and the rest of the major metro regions is now significant," he said.

" 1/8This 3/8 perhaps ties in with the major provincial economic barometers which suggest that the Gauteng economy has been the strongest of the major provincial economies recently."

Estate agents were asked to estimate the average time that properties remained on the market in their areas before being sold.

In the first quarter, Gauteng's average time on the market declined from the previous quarter's 18 weeks and two days, to 15 weeks.

"This average time on the market still remains high, however.

"And read in conjunction with the high percentage of sellers being required to drop their asking price to make a sale, the market can still be said to be unrealistically priced," Van Heerden said.

According to the survey, the percentage of properties sold at less than asking price was 87 percent.

This was a slight improvement on 88 percent in the previous two quarters.

Agents were asked about the factors influencing their market expectations.

"In the first quarter of 2012, we saw a significant rise in the percentage of Gauteng agents citing 'stock constraints' as an issue, to 16 percent, from four percent in the previous quarter," Van Heerden said.

"An increased supply constraint comes as little surprise, given the very significant increase in Gauteng's residential demand rating in the first quarter."

Agents were, however, still seeing significant financial stress-related selling. Even Gauteng, with its improved demand, was experiencing this.

"(Gauteng agents) indicate still very significant levels of financial pressure amongst homeowners, estimating that 21 percent of sellers were selling in order to downscale due to financial pressure in the 1st quarter of 2012," Van Heerden said.

Agents estimated that around 17 percent of sellers were selling in order to upgrade.



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