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Tshwane Metro activity rose sharply in the third quarter after a mediocre start to the recovery...

The third Quarter Tshwane Metro FNB Residential Property Barometer pointed to a sizeable jump in activity levels in the region during the third quarter, after a very mild recovery since the third 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.

From a level of 4.74 in the second quarter, the Tshwane activity level reading has risen significantly to 5.76 in the third quarter. This is now significantly higher than the low point of 4.2 reached in the third quarter of 2008. The third quarter survey was undertaken in mid-August, after the bulk of the SARB’s 2009 interest rate cuts to date.

Tshwane more upbeat than Joburg

The steady rise in the Tshwane Metro activity rating means that the agents surveyed from that region are more upbeat about activity than their counterparts in Joburg. However, they remain slightly behind the survey respondents in the coastal regions.

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

Widespread lack of seller realism

The estimated percentage of properties sold at below asking price showed a slight rise from 86 percent in the second quarter to 93 percent in the third quarter, while the average time of a property on the market prior to being sold declined slightly from 23 weeks and one day in the second quarter to 22 weeks and one day in the third. These two indicators, when read together, point towards the ongoing prevalence of a widespread lack of seller realism in the market. A stronger market may assist in reducing both of these readings in the coming quarters though, through the market 'catching up' to price levels to a degree, therefore making previously unrealistic price levels a little more realistic in future in a stronger market.

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