Still good, but some realism creeping in - residential property

The 7th FNB Residential property confidence indicator is still in positive territory and the perception among the 150 property professionals surveyed is that the market is stabilizing, with a continued down trend in the last quarter.

According to Ed Grundell, CEO of FNB Property, it is still in positive territory, and the growth numbers predicted for the year are still positive.

He maintains that the residential makert is returning to realistic levels, while the middle market is showing a higher level, while first time buyers remain strong. On the foreign front the Garden Route is still showing strong signs of growth.

An interesting phenomenon coming ot the fore is that 53% of sellers are not realizing their asking prices, a trend that was first identified in the Q3 of 2005. That was evident of an over-demand. Buyers are waiting for more realistic prices.

In terms of how long property remains on the market, this has dropped by one week, still at 7 weeks though.

In terms of the buyers, there is no trend that smaller deposits are being put down, which shows that consumers have money, and are willing to put cash down.

On the buy-to-let sector, the market is still doing surprising well. This also shows a level of confidence by property investors. Interest rates will have a major impact on this market.

The majority of real estate professionals maintain a high level of confidence, based on their activity, based on interest rates, seasonality, pricing and stock levels. They did expect to see an increase in coastal sales, although surprising the up-tick has been picked up in Johannesburg.

The coastal sales will begin to move through the system.

Pretoria and Johannesburg were showing different sales patterns, with Pretoria premium properties doing well, while Cape Town shows a significant drop in the premium and low price categories. Durban showed low price sectors showing a significant drop.