This is according to the latest FNB Property Barometer and the FNB Estate Agents Survey which was released last week.
House price growth remained below inflation at a relatively flat 3.8% year on year in March, slightly lower than the 4.2% growth recorded in the fourth quarter of 2018, according the FNB Property Barometer.
“FNB’s valuers rate current residential housing demand as weakening and supply strengthening. However, the pace at which properties are entering the market has slowed noticeably in recent months. This, however, has not been enough to prevent a shift in the balance of demand and supply in favour of buyers. These trends explain the declining house prices and suggest that the market remains slightly in favour of buyers,” the bank said.
However, the bank said that growth in mortgage advances had cautiously accelerated to 4.1% over the last 11 months up to February 2019. Reporting on their perceptions of market activity, estate agents did not indicate any further slowing in housing demand during the first quarter. Show houses were attracting on average 9.97 serious viewers. The average time of homes on the market moved sideways to 15 weeks and three days from 15 weeks and 6 days in the fourth quarter of 2018, halting a rising trend since the end of 2015, which peaked at 17 weeks and 6 days in the third quarter last year. However, agents reported a marginal rise to 95.3%, up from 94.3% in the fourth quarter of 2018, in the percentage of sellers who had to drop their prices to secure a sale.
“The average price drop, however, appears to have stabilised around -9.4%, virtually unchanged from the previous quarter and still above the historical average of -9.0% since 2010,” the bank reported.
“This imbalance is more pronounced in the coastal areas and in the high-net-worth segments - properties valued at R3.6 million or more - with an estimated 97.3% and 100% of properties selling at below asking price, respectively,” the bank reported.
However, according to the FNB Estate Agents Survey, agents perceived market activity to have picked up in first quarter of 2019.
The estate agents’ Residential Activity rating (scale of 1 to 10) registered 5.85 up from 5.27 at the end of 2018, which was consistent with a slight reduction in the time a property is on the market. Downsizing because of life stage was the main reason for selling (23% of sales), while 15.9% of sales were due to financial pressure. Emigration-driven sales were gradually increasing (14.2% of sales), the bank said.
However, the survey found more agents were optimistic than pessimistic about the property market’s near-term prospects.