23 January 2018 MARKET ANALYTICS AND SCENARIO FORECASTING UNIT JOHN LOOS: HOUSEHOLD AND PROPERTY SECTOR STRATEGIST 087-328 0151 [email protected]LIZE ERASMUS: STATISTICIAN 087-335 6664 lize.erasmus@@fnb.co.za The information in this publication is derived from sources which are regarded as accurate and reliable, is of a general nature only, does not constitute advice and may not be applicable to all circumstances. Detailed advice should be obtained in individual cases. No responsibility for any error, omission or loss sustained by any person acting or refraining from acting as a result of this publication is accepted by Firstrand Group Limited and / or the authors of the material. First National Bank – a division of FirstRand Bank Limited. An Authorised Financial Services provider. Reg No. 1929/001225/06 PROPERTY BAROMETER FNB Home Buying Estate Agent Survey Agents saw further market weakness in the 4 th quarter 2017 survey, but this may change soon As at the time of the 4th quarter 2017 FNB Estate Agent Survey in November, agents had not yet perceived any strengthening in the housing market, according to all of the major survey questions. However, while agents reported a market weakening as at the 4 th quarter survey, we believe that since then sentiment in the country has improved considerably following the ruling party’s December elective conference. This, along with certain leading economic indicators pointing higher, could lead to a mildly stronger housing market in 2018. KEY POINTS • Agents didn’t appear to perceive further slowing in housing demand in 2017. Their average estimate for “serious viewers per show house prior to sale” in the 4 th quarter 2017 survey was 10.61 viewers per show house. This was marginally higher than the 10.29 estimate of the prior quarter, with these estimates having moved broadly sideways since 2016. • However, they did perceive a further weakening in the balance between demand and supply in the 4 th quarter survey. The average time of homes on the market rose further to 17 weeks and 2 days in the 4 th quarter survey, continuing a broad upward trend from 11 weeks and 1 day as at the start of 2016. This suggests that current demand levels are still insufficient to mop up available supply of housing stock on the market. • The view of a supply-demand imbalance was supported by a further rise in the percentage of sellers having to drop their asking price, from 93% previous to 95% in the 4 th quarter. The past 2 quarters have also seen an increase in the average percentage price drop to -10%. • Only 2% of respondents surveyed in the 4 th quarter of 2017 pointed to “stock constraints” as an issue influencing their expectations of residential activity in the near term. This reflects further decline since the prior quarter, and is now far below the 24% high reached early in 2015. Effectively, therefore, agents report little in the way of housing supply constraints in the market. • The Residential Activity rating (scale of 1 to 10) declined further in the 4 th quarter of 2017, from 5.42 previous to 5.29. • However, while agents reported a market weakening as at the 4 th quarter survey, which took place in November, we believe that since then sentiment in the country has improved considerably following the ruling party’s December elective conference. In addition, the SARB and OECD Leading Business Cycle Indicators for South Africa have for some time been rising, suggesting improved near term economic performance to come. These factors, we believe, could contribute to improved housing demand in 2018, and we therefore expect that the 1 st quarter 2018 FNB Estate Agent Survey will begin to show some signs of housing market strengthening.
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FNB Home Buying Estate Agent Survey...FNB Home Buying Estate Agent Survey Agents saw further market weakness in the 4 th quarter 2017 survey, but this may change soon As at the time
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