The average listing time of a property is a useful measure of whether the market is moving in favour of a buyer, or seller. Faster-selling houses a sign of a healthy property market, says fixed-fee estate agency Leadhome Properties.
“South Africa’s property market came roaring back to pre-Covid levels in 2021 and this momentum will continue into 2022, with the fourth wave not likely to have any impact on the current upward trajectory,” said the company’s chief executive officer, Marcél du Toit.
This bullish sentiment is driven by data showing a dramatic decrease in the average number of days taken to sell a home across the country’s major centres between 2020 and 2021.
Leadhome data shows that properties in Pretoria took an average of 44 days to sell in 2021, down from 131 days in 2020. Similar trends were seen in Durban (49 days, down from 119), Johannesburg West (54 days, down from 86 in 2020) and Bedfordview/Edenvale, where properties sold almost a month faster than in 2020 (59, down from 81).
In Cape Town, which has benefited from a surge of ‘semigration’ from Gauteng to the coast in recent months, average days to sell dropped from 105 days to 77, while in Johannesburg North, properties currently take an average of 86 days to sell, compared to 121 days a year ago.
“This indicates that despite headwinds such as load shedding, petrol price increases and entering a cycle of interest rates increases, the property market is in ‘an extremely positive place’, with sales in October alone up 50% on the previous years,” said Du Toit.
“We saw a big bang in June of 2020 when the market reopened, followed by a long and steady growth period, and then a dramatic acceleration in October and November with an equally strong December. Now, activity in the big metros is pretty much back to pre-Covid levels, and banks are still lending aggressively, with average bonds in October 2021 at 0.2% below prime.”
The average offer value countrywide is currently in the R1.5 million range, showing a slight decrease over the second half of 2021, Leadhome said.
However, the market is seeing renewed confidence in property as a long-term investment and a vehicle to not only build wealth, but improve wellbeing, with many people still working from home, and a growing number working hybrid, added said Du Toit.
“South Africans are seeing the value in buying property again. They’re feeling more secure in their jobs and their incomes, and as business has become more sustainable, it’s removed the ‘fear factor’ from investing. We’re confident that despite the fourth wave, the first quarter of 2022 will be an exceptionally busy period on the property market, as always.”
Data from FNB, through its property barometer, found that following sustained improvements in the past few quarters, time on market moved broadly sideways to eight weeks in the second quarter of 2021, from eight weeks and two days in the first quarter. This is significantly shorter than the long-term average of 13 weeks, but longer than the five weeks and one day recorded in 2Q04, at the height of property price boom in South Africa.
The improvement was mainly in the affordable segments, with an average of five weeks and five days – seven weeks and six days previously. FNB noted that properties in the 1.6 million-R2.6 million price bucket, which had recorded the best times in the last two quarters, saw time on the market lengthen to eight weeks and one day, from six weeks and six days previously.
Other segments moved sideways, with the > R3.6 million segment recording 11 weeks and one day. Overall, improvements in the time on market could also be due to greater adoption of technology, which in some markets has shortened the search costs, including time spent comparing properties, FNB said.
Data from Ooba showed that the average purchase climbed in the third quarter, to R1.375 million, from R1.304 million in the same period in 2020. For first-time buyers, the average purchase price stood at R1.117 million, from R1.082 million before.