RE/MAX NATIONAL HOUSING REPORT Q1 2018
Slow start for the first quarter
In the first quarter of 2018, Lightstone data revealed that 31,875 new bonds were registered at the Deeds Office, totaling an amount of R33,666,534. This is down by 5,058 registered bonds since the last quarter of 2017. Data from all the major banks reveal that the average bond amount granted during this period was R1,056 million which is up ever so slightly from the R1,051 million of the last quarter for 2017. During the first quarter of the year, around 41,565 bonds were cancelled – 2,935 more than were cancelled from October - December 2017. Of the 51,221 homes purchased between January and March, 14.69% were first-time registrations with the remaining 85.31% repeat sales. These figures are much the same as those that appeared for the last quarter of 2017.
Sales grow for properties under R1.5mil while sales drop for top-end market
Affordable housing continues to do well this quarter. As always, homes priced at R400,000 and below make up the largest percentage of properties sold each quarter. This quarter, 38.11% (up by just under 2% from last year) of all properties sold, both land only and fully developed homes, from the start of January to the end of March fall within this price range. 27.46% of homes sold within the last quarter were priced between R400,000 and R800,000, reflecting a significant growth of 4.3% on the figure from the last quarter of 2017. With a less impressive growth rate of just 0.23% on last year’s figures, homes priced between R800,000 and R1,5 million made up 21.97% of the country’s property sales for this period.
However, homes priced from R1,5 million to R3 million represented only 11.9% share of the market, reflecting a 2.1% drop on figure for the October to December 2017 period. Properties priced over R3 million accounted for just 3.75%, down from the 4.7% market share it represented for the last quarter of last year.
Prices drop across the board
For the first quarter of 2018, Lightstone data revealed that 21,783 freehold properties and 9,928 sectional title homes have been sold countrywide. The current national median price of a freehold home now sits at R1,034,840, with the national median price of a sectional title unit at R998,043. This means that prices for sectional units have dropped by 2% since the last quarter of last year, and by 7.8% for freehold homes since the same period. This seems to be at odds with the positive economic growth curve our nation has seen over the last quarter that ultimately lead the Monetary Policy Committee (MPC) to announce an interest rate cut of 25 basis points just last week.
Growth spurt yet to come
It seems consumers have been playing it safe during this first quarter while they await the results of all the recent changes made to our political and economic environment, such as the instatement of a new president and presidential cabinet, an increase in VAT and a looming threat of junk status. Despite this uncertain start to the year, FNB projected a 4.8% average growth rate in national house price trends for 2018 in their March House Price Index.
“We believe that we will see some positive growth in the next quarter. A lot of the year’s earlier uncertainties have seen positive resolutions, and we predict that this will restore buyer confidence in the property sector,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
About RE/MAX Worldwide and RE/MAX of Southern Africa
Established in Denver, Colorado in 1973, RE/MAX is recognised as one of the leading international global real estate franchise companies with the most productive sales force in the industry. RE/MAX has over 115,000 agents operating in over 100 countries worldwide.
RE/MAX of Southern Africa, which was founded in 1994, is regarded as the pioneer of the RE/MAX international expansion as it was the first country franchise to be sold outside of North America. RE/MAX of Southern Africa was recognised as the top RE/MAX region in the world for 2012 at the group’s Las Vegas convention in March 2013. RE/MAX has over 2,400 agents operating from over 160 offices and licensed in 5 countries in Southern Africa.
To position the company for continued growth in all markets in the next 20 years, Z Capital Properties (Pty) Ltd, a prominent black empowerment company, has purchased a 45% ownership interest in RE/MAX of Southern Africa.