HOUSES STILL TRADING
WHILE ANECDOTAL EVIDENCE suggests residential property sales and mortgage lending have all but dried up, latest figures from the Deeds Office and the SA Reserve Bank paint a far less sombre picture. The South African Property Transfer Guide (SAPTG), which sources housing data from the Deeds Office, reports the total number of housing sales recorded countrywide dropped by 36% in 2008 year-on-year. That’s nowhere near some estimates of sales declining by at least 60% last year.
SAPTG’s figures show that around 169 720 sectional and full title residential properties (priced between R100 000 and R19m) were sold in SA last year with a total value of R137,3bn. That’s down from around 266 920 properties sold in 2007, valued at R207,9bn. The national average house price, as recorded by SAPTG, was therefore still up 3,9% last year: from R779 224 in 2007 to R809 380 in 2008.
In addition, the latest lending figures from the SA Reserve Bank show banks still approved new mortgages and re-advances to the value of R270bn in 2008, down 26% on the R365bn granted in 2007.
Although nobody’s denying the housing market is going through a major downturn, those figures clearly refute any talk of a market collapse. As SAPTG data specialist Dieter Deppisch puts it: “What the SA housing market has experienced over the past two years has been part of a normal cyclical economic trend and a necessary, if painful, correction.”
Although most industry players don’t expect sales activity to return to 2007 levels before 2011, Pam Golding Properties CE Andrew Golding says transaction volumes should increase by around 15% this year on the back of lower interest rates and improved investor sentiment.