SA home sales ‘in a downswing’

Monthly home sales transferred in deeds offices throughout SA are down 6.2% for the first six months of 2015 compared to the same period for 2014‚ an estate agency said.

The monthly average for 2015 so far is R22, 640‚ while last year’s was R24, 140.

Coastal areas‚ according to Homebid statement on Wednesday‚ fared the worst out of the agency’s top nine sales areas‚ with Durban dropping -10.7%‚ followed by East London -9.7% and Cape Town -9.5%.

Gauteng’s East Rand (-9.0%) was the only no-coastal area in the top-five droppers in fourth ahead Port Elizabeth at -7.9%.

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“Only the Vaal Triangle at +0.8% and Pretoria at +0.2% saw slightly more sales and transfer activity in 2015 than in 2014‚” the statement said.

And the outlook isn’t great either.

Said Neville Berkowitz‚ economist and adviser to HomeBid: “We expect the sales and transfer activity levels to drop further during the second half of 2015 as economic conditions are deteriorating‚ consumer confidence levels have hit 15-year lows and interest rate increases are predicted to rise by between 0.25-0.5% per annum before the end of the year.”

HomeBid also found that Johannesburg’s average home prices were the highest at R1, 566, 017‚ followed by Cape Town’s R1, 492, 551 and Durban’s R1, 448, 251.

“Make no mistake we are in a downswing‚” said Berkowitz‚ who added that the Greece ‘no vote’ and Chinese stock market prices crashing by over 30% “are going to negatively affect foreign investors’ sentiments towards emerging economies of which South Africa is one”.

“This could see our interest rates rising sooner than expected to protect our slowing economy from losing foreign funding that is currently propping it up.”