FNB’s survey‚ using deeds-office data‚ showed that average house prices in Cape Town increased by just 0.5% in the past year.
However‚ said Mkhwanazi‚ “in real terms [(ie considering the effect of inflation]‚ average house prices have been declining for a year now.
“Overall‚ this marks the slowest growth rate since the end of 2009 and comes as no surprise‚ given the generally weak economic fundamentals.”
In addition‚ house-price growth had outpaced income growth to such an extent that affordability had been eroded.
“At the same time‚ foreign buyers continue playing a less prominent role in the domestic market‚ while emigration sales have intensifed.”
Mkhwanazi said prices being achieved were also slumping‚ compared with asking prices. Sales in the second quarter were made at 12% below asking prices‚ on average‚ compared with 8.2% a year earlier and a national average of 9.9%.
“Importantly‚ the favourable pricing appears to have spiked demand from first-time buyers‚” he said‚ with the number of property virgins tripling in the past two years.
“Buy-to-let activity also appears to be improving‚ estimated to have accounted for 10.6% of total volume.”
Prices in the southern suburbs of Cape Town contracted by 4.9% year on year in the second quarter‚ and eastern suburbs such as Pinelands and Woodstock experienced a 5.3% price fall.
“Pressure appears to be spilling down the price ladder‚ and away from the mountain‚” said Mkhwanazi.
“Sub-regions in the northern suburbs showed a sharp deceleration in house-price growth in recent quarters. For some time these regions were perceived as offering more affordable housing opportunities‚ as affordability deteriorated nearer the mountain.
“Ultimately‚ prices overshot and completely counteracted their initial attractiveness. Unsurprisingly‚ as demand slowed‚ price growth slowed.”
In the Elsies River/Blue Downs/Macassar areas‚ however‚ price growth jumped to 16.1% in the second quarter‚ and the Cape Flats achieved 11.1% growth.
Mkhwanazi said: “Housing market trends will remain heavily dependent on developments in the broader economy.”
- TMG Digital.
Cape Town's high-end property collapse spreading to the middle
Image: 123RF/Andriy Popov
FNB’s quarterly property survey has confirmed that Cape Town’s luxury house market is on the skids.
“The upmarket areas continue to take a hit‚” FNB analyst Siphamandla Mkhwanazi said on Thursday in a report analysing the Cape Town property market’s performance in the second quarter of the year.
House prices in the city’s priciest suburbs on the Atlantic Seaboard fell 3.7% year on year‚ he said‚ and prices in the city bowl were down 5.7%.
House prices are growing more slowly than they have in a decade‚ foreigners are losing interest in Cape Town property and a surge in emigration is fuelling supply.
FNB’s survey confirmed data a week earlier from estate agent Seeff which said sellers on the Atlantic Seaboard and in upper Constantia had cut asking prices by up to R10m in the past three months.
Mkhwanazi said the price pressure on affluent properties was becoming a common theme across the country but data from Cape Town showed the pressure was spilling over to middle-priced areas.
“By contrast‚ lower-priced areas remained resilient‚ and comfortably in the double-digit [price increase] territory‚” he said.
Sheriff heading to Brian Molefe's house to attach his assets - Solidarity
FNB’s survey‚ using deeds-office data‚ showed that average house prices in Cape Town increased by just 0.5% in the past year.
However‚ said Mkhwanazi‚ “in real terms [(ie considering the effect of inflation]‚ average house prices have been declining for a year now.
“Overall‚ this marks the slowest growth rate since the end of 2009 and comes as no surprise‚ given the generally weak economic fundamentals.”
In addition‚ house-price growth had outpaced income growth to such an extent that affordability had been eroded.
“At the same time‚ foreign buyers continue playing a less prominent role in the domestic market‚ while emigration sales have intensifed.”
Mkhwanazi said prices being achieved were also slumping‚ compared with asking prices. Sales in the second quarter were made at 12% below asking prices‚ on average‚ compared with 8.2% a year earlier and a national average of 9.9%.
“Importantly‚ the favourable pricing appears to have spiked demand from first-time buyers‚” he said‚ with the number of property virgins tripling in the past two years.
“Buy-to-let activity also appears to be improving‚ estimated to have accounted for 10.6% of total volume.”
Prices in the southern suburbs of Cape Town contracted by 4.9% year on year in the second quarter‚ and eastern suburbs such as Pinelands and Woodstock experienced a 5.3% price fall.
“Pressure appears to be spilling down the price ladder‚ and away from the mountain‚” said Mkhwanazi.
“Sub-regions in the northern suburbs showed a sharp deceleration in house-price growth in recent quarters. For some time these regions were perceived as offering more affordable housing opportunities‚ as affordability deteriorated nearer the mountain.
“Ultimately‚ prices overshot and completely counteracted their initial attractiveness. Unsurprisingly‚ as demand slowed‚ price growth slowed.”
In the Elsies River/Blue Downs/Macassar areas‚ however‚ price growth jumped to 16.1% in the second quarter‚ and the Cape Flats achieved 11.1% growth.
Mkhwanazi said: “Housing market trends will remain heavily dependent on developments in the broader economy.”
- TMG Digital.
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