PROPERTY: Recovery in Major Centres Points the Way
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All the major metros in SA are showing signs of a property market recovery and this is likely to start spilling over into smaller centres soon. That’s the word from Gerhard KotzĂ©, CEO of the ERA South Africa property group, based on feedback from the group’s offices countrywide.
“Some metros are doing better than others, but there’s a consistent pattern across the board and that bodes well for the market in general,” he says.
“Johannesburg, Cape Town, Tshwane, eThekwini and Mandela Bay are all showing a significant rise in residential demand, an improvement in confidence levels and greater realism on behalf of sellers in terms of pricing.
“The reasons for this happy scenario are not hard to find and clearly the positive effects of five percentage points worth of interest rate cuts since December 2008, are increasingly being felt and reflected in more property transactions and improved bank lending.”
The ERA group’s experience corresponds to the findings of the FNB Property Barometer in the third quarter of last year, which were based on a survey of estate agents’ opinions in the various regions.
KotzĂ© says that looking at the picture region by region, the Johannesburg area is trailing somewhat in terms of activity levels in the property market compared with the three major coastal areas surveyed, while Tshwane has a slightly stronger reading than neighbouring Johannesburg.
“However compared with the soft market we have had since the start of the global meltdown the overall outlook is definitely far more positive now.”
Other pointers to the improving situation, he says are that the percentage of properties being sold at below asking price has dropped significantly and that the average time of a property on the market prior to being sold has fallen to about 3,5 months in eThekwini, four months in Johannesburg, Cape Town and Mandela Bay and 5,5 months in Tshwane.
“Another interesting fact to emerge from our research is that the percentage of home sellers planning to emigrate has dropped significantly, and athough it’s difficult to interpret this definitively, it’s probably fair to say the effects of the worldwide recession are discouraging emigration at this time.
“And that also has to be positive for the market in general, particularly in the light of anecdotal evidence that increasing numbers of skilled South Africans are actually returning to the country.”
Business News Sector Tags: Property|