The market is very tight, there are still a few buyers - predominantly in the R3m to R5m range. They are extremely particular, wanting homes with updated bathrooms and kitchens and expect more for their money than last year. Homes which appeal to most buyers and will cause buyers to compete to purchase, therefore maximising the price for the property are those which are clearly well maintained, have open plan living areas, new kitchens and modern bathrooms, are light and bright and freshly painted, with large outdoor patios and entertaining features and attractive, well stocked gardens with play space. People are concerned about the economic state of the country and what lies ahead in the Election year. There are many applicants for rentals in the estate and very little stock. There is a big trend to rent rather than buy and remain financially liquid.
There have been 39 property transfers up to the latest Lightstone report this year, compared to 74 last year.
Please let me know if you would like me to send you a Lightstone Estate Report, showing the estate's recent property transfers and sales, very interesting statistics and rankings on info@fbproperties.co.za
*Wishing you all a very peaceful and happy Festive Season Francesca *
BETTERBONDs article of 7 December summarises FNB RESIDENTIAL PROPERTY BAROMETER IN NOVEMBER 2023 :
House price growth plateaued in November.
The FNB House Price Index growth averaged 0.5% v/y in November, virtually unchanged from the previous month's print. Our market strength indices show both demand and supply in negative territory. We suspect that the supply index largely reflects the decline in construction of new housing units, in response to lower demand. It is also possible that the unfavourable selling conditions, characterised by diminished affordability and tighter lending standards, are causing some homeowners to reevaluate their decisions.
• By price, preliminary data shows that price growth is slowing across all our selected price brackets, except for the R1.25-R1.5 million, which likely reflects the buying down effect.
By region, Cape Town is the best performing metro, while Johannesburg sits at the bottom of the pack. In part, this reflects the semi-gration patterns, wherein affluent individuals are selling inland property, and buying in the coastal regions, particularly in the Western Cape.
FNB expect the weak house price growth trajectory to continue for a little while, until inflation and borrowing costs ease more meaningfully from 2H24. Year-to-date (January to November), house price appreciation averaged 1.6%, consistent with our prediction of 1.5% on average for 2023. While price growth should bottom in 4Q23, recovery will likely be moderate as interest rates gradually decline, and demand in the interest-rate sensitive segments slowly returns.
Feedback from estate agents continues to illustrate weakening buying activity, though short-term expectations are now showing signs of optimism. Year-to-date (January to September), new mortgage volumes have declined by 27% according to the latest available Deeds registrar data. The decline is more pronounced in higher priced segments, with the more affordable segments of the market supported by the downscaling trend. Furthermore, younger buyers (including first-time buyers) have been more despondent, reflecting the disproportionate impact of subdued economic activity and high interest rates on younger individuals, while stronger balance sheets often insulate older individuals. Overall, these trends align with their expectations and reflect higher debt servicing costs, reduced affordability, and tighter lending standards.
FNB's projections of slightly lower interest rates and moderately better growth outcomes should help stabilise mortgage volumes next year. They expect volumes to decline by around 30% this year, and partially recover by 5% in 2024.