FNB Property Barometer Estate Agency Survey
Category Market News
Despite the survey pointing towards market weakening in the 3rd quarter, agents’ near term expectations were upbeat, buoyed by a smooth and successful August local government election, which they claim boosted consumer sentiment.
KEY POINTS
The picture emanating from the sample of estate agents surveyed in the FNB Estate Agent Survey for the 3rd quarter of 2016 was one of weakening, both in market activity levels as well as in the balance between demand and supply. Agent stock constraints have alleviated, and the average time of homes on the market prior to sale has stengthened over the past 2 quarters. These are 2 key indicators pointing to this weakened demand-supply balance.
Interestingly, though, was a jump in agents’ perceptions of ”Positive Consumer Sentiment”, which appears to have been overwhelmingly related to what they see as a local government election which went off very well.
Agents perceived a major jump in “Positive Consumer Sentiment”, based almost solely on successful local government in elections early in August, and despite pointing to further weakening in the market since the 2nd quarter.
The 3rd Quarter 2016 Residential Activity Indicator declined further to 5.59, from the previous quarter’s 5.77. When one takes seasonal factors out through a statistical seasonal adjustment, we see that our seasonally-adjusted Indicator also declined from the previous quarter, to 5.65.
Average estimated number of viewers per show house rose to 10.92, from 9.64 in the prior quarter, but the past year’s trend has been broadly sideways after prior decline back in 2014/early-2015.
The percentage of agents citing stock constraints as a factor in shaping their near term expectations declined further to a lowly 6.7%, from the previous quarter’s 10.7%, having steadily declined from a high of 24% in the 1st quarter of 2015.
The market balance has weakened in the past 2 quarters, and the estimated average time of properties on the market has risen from 11 weeks and 1 day in the 1st quarter to 14 weeks in the 3rd quarter.
Agents reported a slight decline in the percentage of sellers having to drop their asking price, from 92% in the previous quarter to 88% in the 3rd quarter of 2016. This comes after a previous gradual rising trend starting back in early-2015. One quarter’s decline is insufficient to point to a trend change in this percentage though, especially given that the average time on the market has been rising and activity has been declining. The estimated average percentage asking price drop, on those properties where a price drop is required to make the sale, was -7%.
Author: John Loos
