The property market has shown some steady signs of recovery after being brought to a complete standstill due to the national lockdown during the second quarter of 2020.
According to Lightstone Property Data, a total of 36 835 bond registrations were recorded at the Deeds Office between July and September this year, translating into a 26% decrease in the number of bonds registered year-on-year. However, the market is bouncing back with a 536% increase quarter-on-quarter which is a considerable correction on the last quarter’s 5 792 bond registrations.
Beyond this, the number of transfers (both bonded and unbonded) recorded at the Deeds Office between July and September recovered to 48 160 from the previous quarter’s 3 869. This translates into a 32% decrease year-on-year and an astounding 711% increase quarter-on-quarter.
Of the 48 160 transfers, a total of 24 666 freehold properties and 12 769 sectional title units were sold countrywide (these figures exclude estates, farms, and land only transfers). The number of freehold properties registered decreased by 31% year-on-year but increased massively from the mere 3 869 that were registered last quarter. Similarly, sectional titles saw a 28% decrease year-on-year but also reflected a good recovery from the mere 1 105 registered last quarter.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa says that none of his team could have predicted that the property market would bounce back as quickly as it has in the last quarter.
“Our prediction is that the market will continue to perform well for the rest of the year provided that we do not fall into another crisis, and is likely to return to volumes similar to those which we were experiencing pre-lockdown” he says.
House prices recover following the second quarter
For the third consecutive quarter, the national median price of sectional titles* dropped when compared to the previous year. At a median asking price of R970 381, the third quarter reflected a 5% drop year-on-year. Yet, despite this drop, the median asking price for sectional titles saw a small correction with an increase of 2% from the R953 084 reported in 2020’s second quarter.
On the other hand, the current national median price of freehold homes jumped back to where it had been in 2019’s third quarter at R1 115 670. When compared to last quarter, the median asking price increased by 1%. The average active RE/MAX listing price amounted to R3 469 844.52 in 2020’s third quarter which is a 15% increase year-on-year and a 23% increase quarter-on-quarter. The average bond amount granted during this period increased by 12% since the last quarter to R1 110 000 and by 2% since 2019’s third quarter.
Market Segment Performance
Properties below R400 000 continue to account for the largest portion of sales at 28% of the total transfers. Properties between R400 000 – R800 000 make up 25.3% of the total transfers which is slightly less than the 26.9% for which properties between R800 000 and R1.5 million account. Properties between R1.5 million to R3 million accounted for 15.2%. Interestingly, properties priced above R3 million accounted for 4.6% of the total transfers this quarter, shifting from the 3% market share it held last quarter. This makes it the price segment that reflected the best recovery since the second quarter.
The top five searched suburbs nationally on remax.co.za during Q3 2020 were Parklands at 2972 searches, Faerie Glen at 2580 searches, Sunningdale at 2514 searches, Bloubergstrand at 2306 searches, and finally, Brackenhurst at 2291 searches.
“The results of the third quarter are better than we expected. It is encouraging to see just how resilient the South African property market is. Yet, tough times await us as we enter a period of recovery without the various COVID-19 financial relief schemes in place. I would therefore like to remind real estate investors to purchase within their means and to consult with a real estate advisor to ensure that they make sound investment decisions,” Goslett concludes.