New data contained in the FNB Estate Agent Survey for the 3rd quarter of 2016 shows further weakening in the local property sector in South Africa – both in market activity levels, and in the balance between demand and supply.
Agent stock constraints have alleviated, and the average time of homes on the market prior to sale has lengthened over the past two quarters, said John Loos, household and property sector strategist at FNB.
The estimated average time of properties for sale on the market has risen from 11 weeks and one day in the first quarter to 14 weeks in the third quarter.
In 2013, however, the average time on the market was as much as 16 weeks and one day, improving dramatically to 12.4 weeks in 2014, and 12 weeks in 2015.
FNB noted that the average estimated number of viewers per show house rose to 10.92 in the thirds quarter, from 9.64 in the prior quarter, but the past year’s trend has been broadly sideways having declined in 2014/early-2015.
The percentage of agents citing stock constraints as a factor in shaping their near term expectations declined further to a lowly 6.7%, from the previous quarter’s 10.7%, having steadily declined from a high of 24% in the 1st quarter of 2015.
FNB said that real estate agents reported a slight decline in the percentage of sellers having to drop their asking price, from 92% in the previous quarter to 88% in the 3rd quarter of 2016.
This comes after a previous gradual rising trend starting back in early-2015.
“One quarter’s decline is insufficient to point to a trend change in this percentage though, especially given that the average time on the market has been rising and activity has been declining. The estimated average percentage asking price drop, on those properties where a price drop is required to make the sale, was -7%,” Loos said.
|FNB Estate Agent activity rating||6.39||5.77||5.59|
|Year-on-year % change||-5.1%||-8.8%||-9.0%|
|Serious viewers per showhouse||11.6||9.6||10.9|
|Agents citing stock constraints as an issue||17.3%||10.7%||6.7%|
|Average time (weeks) on the market||11.1||13.6||14.0|
|Sellers dropping their asking price||88%||92%||88%|
|Average percentage price drop||-8%||-9%||-7%|
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