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High-end houses harder to sell: FNB

Johannesburg - Upper-income properties with an average price of R2m were taking much longer to sell in the first quarter of 2011, a survey released on Monday showed.

"The upper income segment... saw a noticeable rise from 16.4 weeks previous to 19.5 weeks, which was the most significant deterioration in market balance of all four segments," FNB Home Loans strategist John Loos said.

The national FNB Estate Agent Survey suggests that the middle- and lower-income segments were still performing better than the upper-income one.

Lower-income areas were defined as those with an average house price of R582 000, while the average house price in a middle income area was R1.17m.

The high net worth segment - with average house prices of R2.8m - remained flat in terms of demand, said Loos.

The survey found overall a mild strengthening of residential demand over summer.

"This came as little surprise, with summer generally being a seasonally stronger period, and with the Reserve Bank resuming interest rate cutting in September and November," Loos said.

"The most marked improvements in market health in the summer months seem to have been in the arguably more interest rate-sensitive middle and lower income segments."

He said that the survey had been a "little confusing" as it also suggested an oversupply of housing on the market, despite an improvement in demand. This suggested there had been a strengthening in supply too.

There was a noticeable difference in the average time a property spent on the market between those on the higher ends versus lower end segments.

"Agents in the high net worth segment estimated an average time on the market of 20.7 weeks for the two quarters to the first quarter of 2011, up from the previous quarter's 18.7 weeks."

The upper income segment rose from 16.4 weeks to 19.5 weeks, while the middle income segment rose from a previous quarter's 14 weeks to 15.7 weeks.

"The lower income segment was the odd man out here, though in a positive manner, having its estimated time on the market improve from 14 weeks in the previous quarter to 13.1 weeks in the 1st quarter of 2011," Loos said.

"This is in line with agents in this segment reporting the sharpest quarterly rise in demand, to the highest level of all four segments."

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