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The Third Quarter eThekwini Metro FNB Residential Property Barometer pointed to a further jump in activity levels in the region for the fifth consecutive quarter, after a very low bottoming out point in the second quarter of last year. This suggests that the region is beginning to feel the positive impact of the series of interest rate cuts that took place in the first half of 2009.

The Property Barometer is a survey of a sample of estate agents in the major cities of the country regarding their personal experience of market conditions.

The main Barometer question relates to the level of demand activity and agents are asked to rate the level of demand that they experience on a scale of one to 10.

After an initial rise to 5.14 in the second quarter of this year, from 3.27 in the second quarter a year ago, agents estimated the activity rise to have sped up a bit more to 5.86 in the third quarter. The third quarter survey was undertaken in mid-August, after the bulk of the SARB’s 2009 interest rate cuts to date.

eThekwini most upbeat

The steady rise in the eThekwini’s activity rating means that the agents surveyed from that region are more upbeat about activity than any other of the major metro regions surveyed, especially compared with their Gauteng counterparts, although all regions have seen an improvement.

The three major coastal metros, namely eThekwini (5.86), Mandela Bay (5.82), and Cape Town (5.82) are now more upbeat in their estimates of activity compared with Joburg (5.47) and Tshwane (5.76).

Seller realism still lacking

The estimated percentage of properties sold at below asking price showed a slight decline from 92 percent in the second quarter to 89 percent in the third quarter, while the average time of a property on the market prior to being sold declined from 16 weeks and one day in the second quarter to 14 weeks and one day in the third. These two indicators, when read together, point towards the possible start of more realistic pricing by sellers. The greater realism may not only be due to sellers setting prices lower, but also due to the market catching up to price levels, therefore making previously unrealistic price levels now a little more realistic in a stronger market.

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