Houses tough to sell as rates and inflation climb

THE number of people buying property in the first quarter of the year dropped to 14percent from 17percent in the last quarter of 2007, the FNB Residential Property Barometer for the first quarter 2008 reported yesterday.

THE number of people buying property in the first quarter of the year dropped to 14percent from 17percent in the last quarter of 2007, the FNB Residential Property Barometer for the first quarter 2008 reported yesterday.

At 4,96 (on a scale of 1 to 10), the first quarter's activity level rating is the lowest quarterly level on record since the FNB Residential Property Barometer survey was started in 2003, and is down from 5,09 in the previous quarter.

Headline Indicators accompanying the main barometer reading almost all pointed to further deterioration in the first quarter. Eighty-three percent of sellers were forced to accept a price lower than their asking price, while the average time that a house is on the market has risen to 12 weeks and four days from 11 weeks and two days in the previous quarter.

The deterioration was believed to be mostly the result of further interest rate hiking, rising inflation eating into real disposable income, and a general deterioration in sentiment caused by a slowing economy, political change at Polokwane in December and perhaps Eskom too, said John Loos, a property strategist at FNB. - I-Net Bridge

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