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Johannesburg - Estate agents seem to be no more than “cautiously optimistic” at best when providing their near term future expectations about house price growth, according to the latest FNB survey.
When asking agents for the factors influencing their near term expectations, interest rates were by far the most common factor.
The most popular survey response regarding expected house price increases was a 1% to 2% price increase, which is the view of 20% of respondents.
About 18% expect a 3% to 4% increase, 14% expect a 5% rise, 10% anticipate a 6% to 9% growth rate, 9% a 10% increase and only 1% foresee a double-digit rise.
Aggregating the various price growth/decline expectations, the net expected price movement is up 3.7%.
This is a little slower than the prior quarter’s 4.7% expected rise.
"The slightly slower expected growth is perhaps not surprising, given the start of interest rate hiking early this year," said John Loos, FNB's household and property sector strategist.
"But the generally low price growth expectations of the sample of survey respondents does surprise us a little, given the recently good property times that they appear to have been experiencing."
The first quarter of 2014 survey sees further residential activity improvement, despite the start of interest rate hiking in January.
The first quarter activity rating is the highest rating since the first quarter of 2005.
Supply and demand
Agents also saw an improvement in the balance between demand and supply in the first quarter of 2014.
This comes through in responses regarding stock constraints, average time of properties on the market, and those related to sellers having to drop their asking prices.
From a fourth quarter of 2013 estimate of 15 weeks and 1 day, the estimated average time on the market in the first quarter of 2014 survey declined to 13 weeks and 6 days.
This is the lowest estimated average time on the market since the first quarter of 2010.
"This continues a gradual broad declining trend in the average time on the market ever since a 19 weeks and 1 day high at the beginning of 2011," said Loos.
Agents estimated the average percentage asking price drop required to make a sale diminished from -9% in the fourth quarter survey to -8% in the first quarter of 2014.
This is significantly less than the estimated average percentage drop of -13% in late-2011.
"So, a broadly declining trend in average time on the market since 2011, mild recent decline in the percentage of sellers dropping their asking price and a gradually lessening magnitude of average price drop, all point to a slow move towards greater price realism," said Loos.
When asking agents for the factors influencing their near term expectations, interest rates were by far the most common factor.
The most popular survey response regarding expected house price increases was a 1% to 2% price increase, which is the view of 20% of respondents.
About 18% expect a 3% to 4% increase, 14% expect a 5% rise, 10% anticipate a 6% to 9% growth rate, 9% a 10% increase and only 1% foresee a double-digit rise.
Aggregating the various price growth/decline expectations, the net expected price movement is up 3.7%.
This is a little slower than the prior quarter’s 4.7% expected rise.
"The slightly slower expected growth is perhaps not surprising, given the start of interest rate hiking early this year," said John Loos, FNB's household and property sector strategist.
"But the generally low price growth expectations of the sample of survey respondents does surprise us a little, given the recently good property times that they appear to have been experiencing."
The first quarter of 2014 survey sees further residential activity improvement, despite the start of interest rate hiking in January.
The first quarter activity rating is the highest rating since the first quarter of 2005.
Supply and demand
Agents also saw an improvement in the balance between demand and supply in the first quarter of 2014.
This comes through in responses regarding stock constraints, average time of properties on the market, and those related to sellers having to drop their asking prices.
From a fourth quarter of 2013 estimate of 15 weeks and 1 day, the estimated average time on the market in the first quarter of 2014 survey declined to 13 weeks and 6 days.
This is the lowest estimated average time on the market since the first quarter of 2010.
"This continues a gradual broad declining trend in the average time on the market ever since a 19 weeks and 1 day high at the beginning of 2011," said Loos.
Agents estimated the average percentage asking price drop required to make a sale diminished from -9% in the fourth quarter survey to -8% in the first quarter of 2014.
This is significantly less than the estimated average percentage drop of -13% in late-2011.
"So, a broadly declining trend in average time on the market since 2011, mild recent decline in the percentage of sellers dropping their asking price and a gradually lessening magnitude of average price drop, all point to a slow move towards greater price realism," said Loos.
