Market Heats Up for Owners With Houses For Sale

Private Property South Africa
Private Property Reporter

Property investors with houses for sale will wait about 13 weeks to offload their property in the current market, according to First National Bank’s latest Property Barometer. This is a significant drop from the average 21 weeks and 1 day a property was on the market before being sold in the second quarter of 2009, according to the bank’s quarterly survey of a sample of estate agents. The latest barometer indicates a slight strengthening in demand on a quarter-to-quarter basis, pointing to continued residential market improvement. Relatively low interest rate levels, a more relaxed lending stance by banks and positive consumer sentiment will all help owners with a house for sale in the near future, estate agents said. First time buyers have also started to show a significant increase, from 14% of total buying in the second quarter, to an estimated 19% by the end of 2009. The buy-to-let market, however, has showed no significant improvement, as households’ disposable income remains under pressure and rentals fail to cover a significant enough chunk of bond repayments. There is also no sign yet of the strong capital growth that enticed many buy-to-let buyers over the past few years, FNB home loans strategist John Loos said. Good news for investors with a house for sale is that financial stress-related selling is down significantly – dampening supply, while traditional affordability – the difference between income levels and house price levels – are improving, potentially increasing demand. The new area of concern is the costs of owning and running a home, with potential buyers taking into account the impact of potential Eskom price hikes, as well as the probability of water, sewage and municipal rates showing steady increases in coming years. These rising costs lead buyers to favour smaller-sized homes and stands with fewer luxuries, while the mounting urban transport and space pressures are heightening the importance of location, the barometer found.

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