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Cape Town - During 2017, sectional title properties saw an increase in prices of 4% compared to the previous year, while freehold home prices remained unchanged, according to a national housing report for the fourth quarter released by RE/MAX of Southern Africa.
Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, said Lightstone data revealed that the current national median price of a freehold home is R1.122m, with the national median price of a sectional title unit at R1.018m.
He said several aspects continue to impact freehold home price growth. These include weak economic growth, political uncertainty and poor consumer confidence.
On the other hand, sectional title unit prices have been stimulated by the high demand for these types of properties due to their security benefits and lower maintenance costs.
During 2017, 124 243 freehold properties and 63 875 sectional title homes were sold countrywide.
Interest rates
Goslett said although lower interest rates have helped to support the demand for residential property in SA, much of the benefit of the lower rates has been diminished by increasing financial pressure on households, which has negatively impacted consumer confidence.
"The rising cost of living has made it difficult for many to get their foot on the first rung of the property ladder. Persistent low economic growth and rising household expenses are weighing down the demand for mortgages," he explained.
"The result of the muted demand for mortgages and property is subdued house price growth. Although house price growth is marginal, financial data suggests that the market has already seen the bottom and prices are set to continue to go up."
Data
RE/MAX research shows that in the last quarter of 2017, 36 943 bonds were registered at the Deeds Office, totalling an amount of R38 819 406.
Data from all the major banks reveal that the average bond amount granted during this period was around R1.051m, which is down from the R1.11m seen between July and September 2017.
During the last quarter of the year, around 38 630 bonds were cancelled. Of the 52 011 homes purchased between October and December, 14.19% were first-time registrations, with the remaining 85.81% repeat sales.
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