FNB data shows KZN housing market affected by July civil unrest
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KWAZULU-NATAL’S property market is showing signs of being impacted by the looting and violence in July, with a noticeable decline in activity in housing in the third quarter this year, FNB’s property data showed yesterday.
The FNB Estate Agents Survey third quarter market activity sentiment indicator descended to 6.3 points from 6.9 points in the fourth quarter of 2020, and the deceleration was reflected in most price segments and regions.
However, the drop was more noticeable in KZN, where activity fell to 5.5 points from 7.2 points in the previous quarter, and by 23.6 percent quarter-on-quarter, versus only a 5.5 percent decline at national level.
In terms of the time on the market indicator, average time properties spent on the market for sale lengthened for the first time in 12 months, from eight weeks to eight weeks and six days, signalling cooling home buying activity.
While this was seen across most price segments and regions, time on the market lengthened the most in KZN, by about two weeks versus the national average of just six days, quarter-on-quarter, the survey showed.
Estate agents’ sentiment – as measured by the proportion of agents who were satisfied with market conditions – pulled back across most price segments and regions, with the decline more visible in KZN, with only 51 percent satisfied, compared with 72 percent in the previous quarter, and the national average of 74 percent in the third quarter of 2021.
Then, in the reasons for selling perception indicator, the KZN region saw a notable increase in selling due to security reasons, at 11 percent versus 8 percent in the previous quarter, and seven percent for the national average.
FNB senior economist Siphamandla Mkhwanazi said it would be interesting to see whether there was a sustained trend or rather a knee-jerk reaction following the riots.
Overall though, the reason for selling matrix remained broadly unchanged from the previous quarter, and showed that sales were still elevated nationally due to financial pressure as well as a slowing trend of emigration-related sales.
“The FNB Estate Agents Survey shows some impact on the KZN region, but relatively small in the greater scheme of things. However, there may still be lingering longer-term effects, particularly on buyer and investor sentiment,” said Mkhwanazi.