Helmo Preuss
Tue, 24 Jan 2006
Despite reports that the property boom is slowing down, a greater number of buyers are purchasing property to rent out, according to the latest FNB Property Barometer.
The percentage of property buyers who are buying to let out the property rose to 21 percent in the fourth quarter of 2005, after dropping to 18 percent in the third quarter, from 25 percent in the second quarter, the latest First National Bank Residential Property Barometer showed on Tuesday.
Sellers need to get realistic
While the outlook for the South African property market for the first quarter of 2006 remained upbeat, real estate professionals believe that unrealistic expectations by sellers are the most significant contributor to the slowing down of the overall market.
The Barometer determines the market sentiment of top real estate professionals in the major urban areas and has a maximum score of ten with the one to three level being called "not very active", the four to six level labeled as "stable", the seven to eight level "active" and the nine to ten level "very active".
The activity level of 5.8 in the fourth quarter of 2005 was the lowest since the survey started in the fourth quarter of 2003.
This compared with 6.1 in the third quarter, 6.8 in the second quarter and 7.4 in the first quarter, which tends to be the most active quarter of the year.
Asking prices not being achieved
Trends detected during the fourth quarter of 2005 show that the number of properties sold at below asking price has risen to 53 percent compared with 48 percent in the third quarter, 44 percent in the second quarter and 47 percent in the fourth quarter 2004.
The average length of time that a property remains on the market has however reduced to seven weeks in the fourth quarter from eight weeks in the third quarter, which may indicate that sellers are becoming more 'realistic' in their asking price. This compared with seven weeks in the second quarter and only five weeks in the first quarter.
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Last Updated ( Friday, 07 April 2006 )
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