Second quarter residential property market reflects a modest recovery
The Absa Homeowner Sentiment Index (HSI) released yesterday indicated a recovery in the second quarter, back to the level it was in the fourth quarter of 2018, after it declined in the first quarter in the run-up to the general election and due to electricity disruptions.
Property market sentiment in the second quarter was also higher compared with the corresponding quarter in 2018. This was also reflected in the latest national housing report for the second quarter by Re/Max of Southern Africa.
“The overall sentiment of current market conditions is slow at best. However, the data for the second quarter of 2019 points to the first glimmers of hope for a property market that is becoming increasingly active,” according to the firm’s chief executive, Adrian Goslett.
Lightstone Property data showed that the 45109 bonds registrations between March and April this year translated into a 13.2percent increase in the number registered since the first quarter of 2019, and an increase of 18.5percent increase since the second quarter of 2018.
The number of transfers recorded at the Deeds Office between April and June increased by 6percent from last year, and by 14percent compared with the first quarter.
“While it is normal for the second quarter to record more transactions than the first, it is encouraging to see there is also sturdy year-on-year growth. I remain hopeful that the market will become increasingly active,” he said.
The HSI, which reflects the percentage of survey respondents with positive sentiment regarding residential property market conditions in the country, increased to 77percent in the second quarter of 2019 from 73percent in the first quarter and 73percent in the second quarter of last year.
The main positive factors affecting sentiment were that property was viewed as a secure asset (37percent) and that it was an asset increases in value (19percent).
Negative factors affecting sentiment were the poorly performing economy (29percent), some ongoing political uncertainty (20percent), and land expropriation without compensation (15percent), said Du Toit.
Although consumer confidence was still low in the second quarter, it was, as in the case of property market sentiment, slightly higher compared with the first quarter, mainly due to the outcome of the general election in May, he added.
The positive sentiment towards selling property declined somewhat to 39percent in the second quarter from 40percent in the first quarter and 41percent in the fourth quarter of last year.
Du Toit said expectations of continuing low economic growth, relatively low inflation and the possibility of slightly lower interest rates were likely to continue to drive property market sentiment in the rest of the year.