Re­cov­ery in ma­jor cen­tres points way

Weekend Argus (Saturday Edition) - - PROPERTY -

ALL THE ma­jor South African met­ros are show­ing signs of a prop­erty mar­ket re­cov­ery and this is likely to start spilling over into smaller cen­tres soon, says Ger­hard Kotzé, chief ex­ec­u­tive of the prop­erty group ERA, based on feed­back from their 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.

“ J o h a n n e s b u r g , C a p e Tow n , Tsh­wane, eThek­wini and Man­dela Bay are all show­ing a sig­nif­i­cant rise in de­mand for res­i­den­tial prop­erty, an im­prove­ment in con­fi­dence lev­els and sell­ers are more re­al­is­tic about pric­ing.

“Clearly the pos­i­tive ef­fects of in­ter­est rate cuts of five per­cent­age points 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.

Kotzé says that re­gion by re­gion the Joburg area is trail­ing some­what in ac­tiv­ity lev­els in the prop­erty mar­ket, com­pared with the three ma­jor coastal ar­eas sur­veyed, whereas Tsh­wane has a slightly stronger read­ing than its neigh­bour.

“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,” he says.

Other point­ers to the im­prov­ing sit­u­a­tion, he says, are that the per­cent­age of prop­er­ties be­ing sold at be­low their listed prices has dropped sig­nif­i­cantly and the av­er­age time of a prop­erty on the mar­ket be­fore be­ing sold has fallen to about 3.5 months in eThek­wini, four months in Joburg, Cape Town and Man­dela Bay, and 5.5 months in Tsh­wane.

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