Median price of sectional title property pips freehold in Q2 2018
Following a “slow” first quarter, the property market is beginning to show promising improvements, according to Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa.
“Over the period of April to June 2018, Lightstone Property recorded a total of 38,055 bond registrations at the country’s deeds offices, totalling a value of R40,790,027,000,” he said. “This is a 19.4% increase on the previous quarter that, in more concrete terms, equals a total of 6,180 more registered bonds.
“The average bond amount granted during this period was R1,072,000, which is a 1.5% increase on the R1,056,000 of Q1 2018. Additionally, only around 39,649 bonds were cancelled this quarter – 1,916 less than were cancelled in the January to March 2018 period. All of these figures point to a sturdy and strengthening market.”
Of the 61,716 transfers (not all transfers are bonded) recorded at the deeds offices between April and June, a total of 8,836 (14.3%) were first-time registrations and 52,880 (85.7%) were repeat sales. This percentage split was much the same in the first quarter of 2018, as were the results for the top-five most searched suburbs on the RE/MAX website. Gauteng and Western Cape remained the most searched regions, with Bryanston taking first place at 2,111 searches.
Unsurprisingly, homes priced at R400,000 and below still make up the largest percentage of properties sold each quarter. What is surprising, however, is that in Q2, only 34.2% of transfers fell within this price range – 3.9% lower than the figures from Q1. Similarly, down by 4.2%, only 23.3% were priced between R400,000 and R800,000.
Beginning the upward curve at 1.1% higher than last quarter’s figures, 23.1% of transfers were priced between R800,000 and R1,5m. Showing somewhat more impressive growth of 2.5%, 14.4% of transfers were between R1,5m and R3m; and, transactions of more than R3m accounted for 5% of all bond registrations for the second quarter, climbing from the 3.75% at end March to higher than where it had been at the end of 2017 at 4.7%.
In Q2 2018, a total of 32,453 freehold properties and 14,431 sectional title units were sold countrywide (*these figures exclude estates, farms, and land only transfers). This translates into a 49% increase in the number of freehold properties sold in the first quarter, and a 45% jump in the number of sectional title units sold.
The average active RE/MAX listing price for Q2 grew by 15% from Q1 to R2,737,257. Considering how each housing category is performing, Lightstone revealed that the current national median price of a freehold home now sits at R1,004,733, which translates into a 3% drop on Q1.
“The drop in freehold property prices was likely the result of a slow first quarter which saw many homeowners adjust their prices in the second quarter to sell in a slow market,” said Goslett. “After a promising second quarter, however, we are likely to see prices grow in the third quarter.”
On the other hand, the national median price of a sectional title unit now sits at R1,010,752, which is a 1.3% growth in price since Q1.
Goslett attributes this growth to the popular trend of downscaled living. As the demand for these types of properties continues to grow, so too will their prices.
“As predicted, the second quarter of 2018 has proven to show signs of a strengthening market. Provided fuel price hikes settle into more sustainable territory, and our political climate remains stable, we predict steady growth to continue into the third quarter of this year.”