Saved
0
Removed
0
Shared
0
IOLProperty - South African Property For Sale
Friday Aug 17, 2012

More Gauteng property 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

 
comments powered by Disqus

Calendar

Search

Property Searches:

RSS Feeds

Browse Property For Sale

© Independent Online Property Joint Venture (Pty) Ltd. All rights reserved.
Reliance on any information this site contains is at your own risk. Please read our Terms and Conditions of Use and Privacy Policy.