FNB Home loans released their Residential Property Confidence Indicator for the 4th quarter of 2007. In his report, Jan Kleynhans, chief executive officer at FNB Home Loans, further illustrated the current slowdown in market activity.
Rising interest rates, the implementation of the National Credit Act 8 months ago and inflationary pressures have shown to be the three major factors that continue to place pressure on the property market.
The result of this is that sellers are still struggling to obtain their asking prices, and properties are remaining on the market for almost three months on average. Also, the proportion of first time home buyers is relatively low, and the buy-to let market is at an all time low.
But, FNB reports that not all properties have been affected. While houses priced at R1million or more are suffering most, townships are still recording growth of up to 40%.
Property price inflation in the lower-prices segment continued to outperform inflation levels for the middle and upper-prices segments, Kleynhans said.
“Lower priced properties sell faster and more of them achieve their asking price than expensive properties.”
The South African residential property market had certainly seen a significant slowdown since the heydays of 2003/2004, he said.
Related: Home Loans For First Time Buyers