The FNB Estate Agent Survey is of a sample of estate agents predominantly in SA’s major metro regions. The 1st question asked to agents is with regard to their perceptions of residential market activity in their areas, a subjective question on a scale of 1 to 10, with 10 being the strongest level of activity.
The 2nd Quarter Residential Activity Indicator declined mildly, from the previous quarter’s 6.57, to 6.33. However, FNB believes that seasonal factors are largely to blame for this decline, with the onset of the Winter months in the 2nd quarter. They base this argument on the statistically seasonally adjusted version of the Activity Indicator. On a seasonally adjusted basis, the activity rating actually continued to rise in the 2nd quarter, from a previous quarter’s 6.27 to 6.45, the highest seasonally adjusted level since the 3rd quarter of 2005. So, seasonal factors eliminated, it would appear that the broad renewed strengthening trend in residential activity that started back in 2012 is still intact.
However, while still pointing to broad residential activity strengthening when seasonal factors are ignored, the sample of agents surveyed may be suggesting an expectation that the recent pace of improvement may be about to lose some steam.
The pattern of 2 post-recession “recoveries” in residential activity co-incides with 2 “mini-peaks” in the FNB House Price Index growth rate, the 1st in 2010 and the 2nd in 2012, while the same patterns are observed in both the year-on-year growth rates in the SARB Leading Business Cycle Indicator and Transfer Duty revenues.
However, while agents continued to point to a broad improvement in residential market activity having taken place in the most recent 2nd quarter 2013 survey, their near term expectations of activity have been broadly flattening out in recent quarters.
Perceptions regarding the economy amongst respondents continues to diverge, with an equal percentage experiencing “Economic Stress/Pessimism” to those perceiving “Positive Consumer Sentiment”. This does not surprise FNB too much, with economic growth statistics of recent quarters suggesting that the country’s economy is rather directionless, and may battle to even reach 2% growth for 2013.
Overall, therefore, agents have seen more improvement in market conditions in the 2nd quarter, but are far from unanimous regarding the strength of the drivers of the market in the near future.