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Demand for holiday homes falls

Feb 05 2013 11:25 I-Net Bridge
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Johannesburg - Holiday house demand slipped to 2% of the residential market in 2012 from 2.5% in 2011‚ according to the FNB Estate Agent Survey.

The survey is dominated by major city suburban estate agents‚ but it does attempt to capture the relative trends between primary and secondary residential demand.

According to this line of survey questioning‚ which started in 2007‚ when expressed as a percentage of total home buying‚ the holiday home buying component bottomed at 1.5% in 2010 after reaching a high of 4% in 2007.

FNB Household and consumer sector strategist John Loos said on Tuesday that in recent years‚ tougher economic and financial times for South Africa’s household sector have meant a greater focus on necessary expenditure items relative to “non-essentials”.

For the past three years‚ average price growth in the major metro regions FNB estimated that this exceeded that of holiday towns‚ and in 2012 saw average price growth of 3.8%.

By comparison‚ the Holiday Towns Price Index saw small average price growth estimated at 0.9% in 2012‚ thus still seemingly lagging the major cities’ performance. However‚ this positive 0‚9% figure was significant after having seen a decline of -5.2% in the average Holiday Town price of 2011 compared with the 2009 average level.

“The lagged impact of mildly improved holiday home demand‚ after the low of 2010‚ may therefore just have been sufficient to improve the market balance by 2012‚ and restore some price stability after a period of decline‚” he added.

“These holiday town markets are still expected to lag the major city markets in terms of price performance for the foreseeable future‚ as a result of still-significant economic and household sector financial weakness. In addition‚ many municipal rates and utility bills are rising steadily‚ making second homes significantly more costly to own and run‚” he added.  

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