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Friday Jul 10, 2020

Lockdown 'brings property market to a standstill'

The national lockdown brought the local housing market to a standstill as the Deeds Office closed during Alert Level 5 and most of Alert Level 4. This was worsened by the fact that real estate services were unable to operate until Alert Level 3. The result saw historically low levels of activity for the second quarter of 2020.

According to Lightstone Property data, a total of 5792 bond registrations were recorded at the Deeds Office over the period of April to June 2020. This translates into an 87% decrease in the number of bonds registered YoY and an 85% decrease QoQ. Beyond this, the number of transfers (both bonded and unbonded) recorded at the Deeds Office between April and June amounted to 5941, which is a 91% decrease from last year and an 88% decrease from Q1 2020

"These numbers are not surprising considering that no transactions were processed at the Deeds Office during most of April and May. However, the results for June provide a glimmer of hope that activity will slowly return to normal now that lockdown restrictions have eased," explains Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.

Sectional Titles Hit Harder than Freehold Properties

Following the trend from last quarter, sectional titles continue to be worse affected by the lockdown. Reflecting a significant decline, the national median price of sectional titles* dropped by 8% to R953,084 from the R1,032,045 reported in Q2 2019 and dropped by 1% since last quarter.

Freehold homes reflected a current national median price* of R1,109,852 which is a 3% decrease on the median asking price for Q2 2019 (R1,148,167). When compared to last quarter, the median asking price decreased by 6%. The average active RE/MAX listing price amounted to R2,828,450.55 for Q2 2020, which is a 1% increase YoY and a 5% decrease QoQ.

"The average bond amount granted during this period similarly decreased by 10% since last quarter to R990,000* and by 10% since Q2 2019. This could be the result of the drop in demand and the slight downward pressure on property prices," says Goslett.

Of the 5,941 transfers, a total of 3,869 freehold properties and 1,105 sectional title units were sold countrywide (*these figures exclude estates, farms, and land only transfers). The number of freehold properties sold decreased by 88% YoY and 84% QoQ while sectional titles saw a 94% decrease YoY and 92% QoQ.

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