The information in this article is courtesy of iAfrica (Property demand improves – 23 March 2009)
The FNB Residential Property Barometer has shown a mild improvement in property demand levels, although it still indicates a rather unconvincing picture.
The Property Barometer surveyed a sample of the estate agents from major cities of South Africa and asked questions related to the demand they are experiencing on a scale from 1-10. The third quarter of 2008 stood at a record low average of 4.1 but rose in the final quarter to 4.6 and according to the Barometer the first quarter of 2009 stands at 4.8.
Of the surveyed agents, 41% believed that further strengthening in demand might be experienced in the following quarter, showing that agents are feeling positive about the near future.
Another survey showed that 33% of respondents feel positive about interest rate cuts, although 31% still believe that banks’ lending criteria is still too high and deposits required are making it hard to buy property. Also, 19% of the agents felt the air of general pessimism was still a problem – referring to the global economic crisis and job losses.
FNB Property Strategist, John Loos, says that one should not expect residential demand to skyrocket as it did in 2003/04 as interest rates fell rapidly, because 2003 rate cuts were accompanied by a very positive economic growth and employment situation at the time. He added that strict lending criteria are not set to ease dramatically any time soon but interest rate cuts should improve affordability.
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