Gauteng house sales not as bad as they seem

Gauteng is not the weakest market in terms of house sales‚ despite there being an oversupply of stock in some parts of the province.

A recent report released by Seeff properties shows that Centurion is sitting with 9‚000 properties on the market. This‚ according to the company‚ equates to 18 months’ worth of property that must be sold without any properties coming into the market.

In its report‚ Seeff has also noted that buyer enquiries have halved since the start of the year and “we are now in the slower period with activity only really expected to pick up from September onwards‚” said Steve van Wyk‚ managing director at Seeff in Centurion.

FNB household and property sector strategist‚ John Loos‚ agrees with Seeff that house sales have indeed declined.

“But recently‚ our FNB Estate Agent Survey has actually shown Gauteng homes average 12 weeks on the market prior to sale‚ which is significantly shorter than the three coastal metros’ average time on the market of nearer to 20 weeks.

“So‚ I don’t think that Gauteng is the weakest market at present‚ but yes there has been significant weakening in activity in recent years since the economy began to stagnate and interest rates rose‚” Loos said.

Seeff has also attributed the decline in house sales to the current recession along with “negative sentiment”.

However‚ the company says‚ there are a lot of opportunities for sellers‚ but they need to consider among others‚ the price of the property‚ fixing the property before the sale‚ having a sole mandate‚ and experience and good negotiation skills‚ before selling property.

“We are taking offers daily‚ but only on those properties that are well-priced and where buyers are now seeing value‚” Van Wyk said.

The recent FNB property barometer shows that Gauteng measured a “lowly” 2.3% year-on-year house price growth.

“We have seen slow average house price growth‚ not only in Gauteng but across the country‚ barring the Western Cape‚” Loos said.

The Western Cape‚ according to the FNB property barometer‚ measured 5.7% in price growth‚ which is slower than the revised 6.9% rate of the previous quarter and “significantly” lower than the 10.8% recorded in the first quarter of last year.

Despite‚ this decrease‚ the Western Cape average price growth is higher than other major regions.

Kwa-Zulu Natal has measured 2% house price growth. Kwa-Zulu Natal is followed by Mpumalanga‚ North West‚ Limpopo‚ Free State and Northern Cape‚ which have all measured 1.7% year on year growth.

The Eastern Cape has experienced a slight decline of 0.1%.

According to the FNB property barometer the “relatively strong” house price growth recorded in the Western Cape can be attributed to the province having the second highest economic growth rate.

“The region’s market is the most expensive in SA‚ with an average transaction price estimated at R1.437m in the second quarter of 2017‚ the next highest average price being that of Gauteng at an estimated R1050m‚” the barometer says.