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Monday Jul 13, 2015

Property sales drop 10% in Durban

Durban estate agents report that houses are selling like hot cakes, but in the latest deeds office research the number of homes successfully transferred in the city has plummeted by more than 10% since last year.

It's a muddled view, but according to preliminary data released by the national deeds office, monthly home sales transferred in various offices throughout the country averaged 22 640 for the first six months of this year, compared with the monthly average of 24 140 in 2014, a drop of 6.2%.

And the highest drop in activity level was registered in Durban, which plummeted by 10.7% for the first six months of this year compared with the same period in 2014.

Property Economist Neville Berkowitz, who analysed the month-on-month deeds office data, said Cape Town had experienced a 9.5% drop and Johannesburg a drop of 6.1%.

Berkowitz, who also consults for the estate agency HomeBid, said he expected the sales and transfer activity reported to drop even further during the second half of the year as economic conditions deteriorated. "Consumer confidence has hit a 15-year low," he said, adding that while estate agents might be busy, at least 30% of their sales "fell out of bed" at the final hurdle because home loan applications failed to get bank approval.

A noted Pietermaritzburg conveyancing attorney said commercial banks were hamstrung. "The whole process has become extremely convoluted. No one is willing to put their neck out and approve anything unless all the boxes have been ticked. Yes, we are very busy, not on volumes (of transactions) but rather on the amount of work it requires to get the deeds registered," he said.

First National Bank household and property strategist John Loos agreed the market had "flattened".

In the newly released First National Bank Estate Agent Survey, which sampled estate agent activity from the major cities in the four quarters up to and including the second quarter of 2015, the most buoyant sector had been the lower income market and rising costs associated with big properties was "speeding" up rates of downscaling.

He said the shift towards a more conservative approach in the residential market might have been affected by general consumer confidence, which according to the bank's second quarter Consumer Confidence Index had dropped by 15%. "That was a shocker at best."

In the July 2015 Pam Golding Residential Property Index, chief executive Andrew Golding reported "impressive" growth in KwaZulu-Natal in the lower and higher income price bands.

Greta Daniels, the sales and operations manager for Pam Golding in Durban, said in June sales to the value of R46 million had been concluded - a 10% increase when compared with sales recorded for the same period last year. She said areas in demand were mainly the coastal areas of Durban, Durban North, La Lucia and Umhlanga.

The Mercury


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