Whatshot

2026
2025
November
2024
June
April
2023
March
2022
2021
2020
March
February
2019
December
November
October
September
August
July
June
May
April
March
February
2018
December
November
October
September
August
July
June
May
April
March
February
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
May
April
March
February
January
2013
December
November
October
September
August
July
June
May
April
March
February
January
2012
December
November
October
September
August
July

Property Talk

Property Talk

Author: Andreas Wassenaar
Date: 2018-06-15

Estimated Housing Market Transaction

For Estate Agents it's all about trade. Without transactions being concluded, agency fees are not earned. The volume of transactions is therefore critically important and of interest to those involved in the real estate market.

According to FNB the estimated housing market transaction volume growth started 2018 improved on 2017 rates, but disappointing economic growth at the start of 2018 along with what FNB's Estate Agent Survey was saying late last year, suggests that transaction growth may get weaker before it gets better in 2018.

This is exactly what seems to be happening on the ground. FNB report that total transactions registered by individuals rose by 12.8% year-on-year for the 3 months to February 2018. The volume of transactions on which a bond was registered also grew, but by a lesser 6.8% year-on-year.

We are definitely better off than 12 months ago where total volume declined by -10.1% year-on-year for the 3 months to February 2017 and bonded transactions declined by -10.8%, having been in decline for much of 2016. Real GDP growth trended mildly upwards for most of 2017.

Remember the -0,3% contraction in real GDP at the beginning of 2016, to the +1,1% positive growth in the 1st quarter of 2017 and then to the 1,5% growth by the final quarter of 2017.

The noticeable slowing of Real GDP growth in the 1st quarter of 2018 to 0,8% year-on-year was the big disappointment and suggests that new mortgage lending, which tracks the general economic growth so closely, may get worse in the near term before it gets better.

Mortgage originators and the large commercial banks typically watch these stats closely in order the anticipate demand for new mortgages. What is fascinating is when we consider the total value of property transactions over the same period as volumes traded and see that the total growth rate by value is significantly lower that the volumes recorded indicating that the average value of transactions is lower with the higher end of the property market suffering and the lower end outperforming. For the 3 months ending February 2018 the average value per transaction declined by -7,8% year-on-year.

The growth in the value of all transactions for individuals for the 3 months to end Feb 2018 was therefore lower than volumes and recorded as 5,6% year-on-year.

The value of bonded transactions grew by a lesser 3,5%. We have witnessed these stats in action in our Ballito area for the first five months of 2018 where the higher end of the residential real estate market has been exceptionally slow to trade while the lower end (R2m-R3m bracket) has shown to be very active.

Certain price brackets in certain markets attract active attention, such as the R6m bracket for a freehold home in Simbithi, or a R3m home in Palm Lakes. The R10m to R20m bracket in Zimbali has by contrast proven to be very slow to trade, unless the property represents compelling value at the price.