PropertyFox Highlights from PG Property Report 2019
The year in reflection for property, and 2020 expectations.
These are the points that stood out for us in the Pam Golding Annual Residential Property Report for 2019. A report that looks as the totality of the property sales nationally, regardless of real estate agency. The majority of the data is from Lightstone, an analytics tool used in the property industry.
Security Estate & Sectional Title on the Rise
Security Estate vs Freehold homes is on the rise, and in the last five years have out-sold freestanding houses by ~6%.
Western Cape Remains Sought-after
Western Cape still remains strongest region of growth – with much of this being due to semigration from other Provinces.
Popular Property Price Bracket
Overall the most popular property price bracket selling nationally is between R400k – R1.5 m. Anything priced over R3m is in the lowest demand bracket with only 5% sales. Of all the Provinces, Western Cape still shows the most growth in all price brackets.
Best time for a Bond
Now is the time to get a bond, with the highest bond approval in Q4 this year. For the year to date, the average concession is just 0.04% above prime – the best rate charged since January 2011.
Average Age of First Time Buyer Risen
Interestingly enough, the average age of first-time buyers has risen in the past year from 33 to 34 years.
Primary Residence over Holiday, but Investment Properties Still Selling
Most homes still remain primary residences with nominal loans being issued for holiday homes. According to FNB, demand for investment properties has been particularly strong in the coastal metro markets – which are the best performing housing markets in SA, particularly Cape Town, with investment properties accounting for 10.6% of all properties sold during Q2 2019.
Emigration Still Catalyst for Sales
Emigration has also become a more prominent factor in the last two years. According to FNB, emigration sales have risen to 13.4% in Q2 2019 – which represents a 10-year high. A map of where most South Africans are emigrating from shows that the majority of emigrants are leaving from Gauteng – a factor which is undoubtedly contributing to the subdued Gauteng housing market.
Realistic Valuations & Pricing is the Only Way to Go
Accurate valuations and realistic pricing remains key to be considered in this market. This underlines the critical importance of accurate, market-related pricing when a property is first brought to market. Buyers are well-informed and many under financial pressure, so a serious seller is advised to price right.
Maxine Miller, Senior Valuations Analyst at PropertyFox also added that: “Immediate interest, or lack thereof, is the clear indicator of whether the property is priced correctly for buyers’ demand.” She further also advises that sellers should be cautious of over-marketing their properties by appointing too many agents. Contrary to popular belief, sellers reduce the risk of not achieving their goal price when choosing only one sole agent as opposed to multiple agencies.
Looking Towards 2020
Given that any recovery in the housing market is likely to be modest, now more than ever it is advisable for homeowners to focus on location and minimal overheads (security, maintenance and utilities). With household incomes under pressure and growing congestion, well-located growth nodes are increasingly appealing for convenience, reduced transport costs and future return on investment, when selling or renting out.
Houses with water and energy saving features, or located within a development or estate with green amenities are likely to become increasingly attractive to buyers and add value on future resale.