Pandemic exacerbates decline in property deals
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CAPE TOWN - Covid-19’s effect on the property market was already felt in the first quarter, as bond registrations had already fallen 5.6percent compared with the same period in 2019, while the number of property transfers fell 10percent.
RE/MAX of Southern Africa chief executive Adrian Goslett said yesterday that while the lockdown started at the end of last month, Lightstone Property data showed 37609 bond registrations were recorded at the Deeds Office from January to March, a 5.6percent year-on-year decline and a 1.2percent decrease compared with the fourth quarter last year.
The number of transfers - bonded and unbonded - at the Deeds Office in the period fell to 51315, a 10.5percent decrease from last year and an 18.7percent decline the last quarter of 2019.
Sectional titles, previously one of the strongest segments in an already weak property market, seemed to have been affected the worst.
The national median price of sectional title homes dropped 8.2percent to R963971 from the R1049810 in the first quarter last year, and it fell by 5.9percent from the fourth quarter last year.
Meanwhile, the average bond amount granted decreased 1.2 percent from the last quarter to R1098000 and 0.4percent from the first quarter of 2019.
On the other hand, the national median price of a freehold homes increased 5.5percent to R1183943 over the median asking price for the first quarter 2019. When compared to the last quarter of 2019, the median asking price increased 4.6percent.
Of 51315 transfers, 24290 freehold properties and 14354 sectional title units were sold countrywide.
Properties below R400000 accounted for the largest portion of sales at 29.2percent of total transfers. Properties R400000 to R800000 made up 24.2percent, while properties from R800000 to R1.5million amounted to 25.8 percent of transfers.
Properties priced R1.5m to R3m accounted for 15.8 percent, while properties priced above R3m accounted for 5percent of the total transfers.
“The results of the first quarter paint a picture of what is ahead. My prediction is we are likely to see even slower growth in the next quarter, as our economy recovers from the lockdown and the other fiscal consequences of Covid-19,” Goslett said.
Seeff Property Group chairperson Samuel Seeff said on Monday that following two 100 basis point interest rate cuts since January, he expected the property market would emerge from the lockdown with a level of pent-up demand, but still mainly in the primary residential market R1.5m and up to R3m in some areas.
"Above that level activity was likely to remain muted,” he said,
FNB’s recent Property Barometer said the lockdown was likely to have a dramatic effect on house sales volumes in the second quarter, but not prices.