Anna-Marie Smith
2 minute read
19 Sep 2013
6:00 am

SA house sales turn a corner

Anna-Marie Smith

The tide of South Africa's depressed property market is turning, with the sector holding its own among the world's top performing markets and sales topping those of the World Cup period.

Image courtesy stock.xchnge

The Knight Frank Residential Research Global House Price Index House rose by 2.4% in the second quarter of 2013, and by 6.1% over a 12-month period. South African property prices grew the 11th fastest out of 55 countries.

Dubai ranked in first place, with a 22% rise over a year. Taiwan had the highest quarterly rise of 7.4%.

Of particular interest is the contrasting fortunes of the worlds’ two largest markets: China ranked fourth while the US ranked 12th. Although Europe recorded positive annual growth for the first time since 2010, it remains the weakest performing world region, says Kate Everett-Allen, an analyst with Knight-Frank.

The local housing market is in the healthiest position since 2009, says Samuel Seeff, chairman of Seeff Properties.
Sentiment has lifted and investors are returning to property as confidence resurges, confirms Laurie Wener, MD of Pam Golding Properties Western Cape, who adds that buyers remain value-driven and well informed.

And it shows in the numbers.

FNB’s House Price Index for August reveals the overall market grew 6.4% (up 0.1% on July).

According to Seeff, these are the best figures since 2007. Year-to-date sales figures are up 18% on last year. They are better than in 2010 when the market was buoyed by the positive sentiment of the FIFA Soccer World Cup.

Buoyed sales are naturally also reflecting in bank lending patterns – with bond registrations up 7 to 8%, beating 2012 and 2009 averages.

According to Peter Swartz, head of Absa Home Loans, the bank has seen an uptick in home loan applications and registrations in the first eight months of the year.

Major stock shortages have become an almost countrywide challenge for estate agents, says Seeff.

Although the balance between supply and demand is improving as SA moves closer to a position of equilibrium in the primary housing market, the sub-R1.5 million sector remains dominant, he says.

Increased sales over the past 12 months across the Western Cape Metropole, for example, is seeing the Atlantic Seaboard
and City Bowl approaching 2007 levels with stock shortages reported in almost all Southern Suburbs, Western Seaboard and coastal areas.

Other “hot spots”, have seen record house prices due to demand for prime locations.

Pam Golding Properties Hyde Park joint area manager, Jonathan Davies says record prices this year includes a Parkview plot sold for R30.5 million, by far exceeding the previous record of R20 million, and a Parkhurst house that sold for over R5 million.

Seeff foresees an interest rate hike in the not-too-distant future. He advises mortgage holders to prepare for such an eventuality. The Reserve Bank will need to take action to strengthen the rand which has weakened by 30% over the past year, he says.

Anna-Marie Smith is a freelance property writer.