Property Talk

We know that average house prices slowed to 5% in 2016 according to FNB, down from 7,2% and 6,5% in 2014 and 2015 respectively. Once we factor in CPI inflation we actually see that real house price growth was negative to the tune of 1,2%. I get very excited when I see these statistics as I know great buying opportunities will typically follow.

To get to grips with actual transfer data and how this may have changed over the past 11 years since 2006, I downloaded the national transfer data supplied from the deeds office and divided these into freehold and sectional title sales for each year.

The first thing you realize when considering this data is the peak experienced in 2006 and that this actually continued for 2007, despite the global financial crisis being in full swing by then. In 2006 there were 282,371 registered residential property transfers, of which 96,330 were sectional title sales and 186,041 were freehold transfers. For 2007 the freehold transfers only dipped by 3,69% to 179,177 and the sectional title transfers actually increased to 102,279 registrations.

Coming off a very low base the 2010 figures showed a 14,43% growth on the prior year. What I found particularly remarkable was that for the five-year period 2011 through 2015 the annual number of registered sales remained similar from one year to the next.

The total annual registered sales growth figures for this period were 3,04% and 1,42% in 2011 and 2012 respectively. Then in 2013 there was a bit of a surge with freehold sales growing by 5,52% and sectional title sales growing by 10,71% and total sales posting growth of 7,14%. The next two years showed total sales growth of 2,80% and 1,92% with total sales recorded as 197,332 in 2014 and 201,126 in 2015.

What makes 2016 significant is that the sales figures were significantly down and showed negative growth for the first time since the big recession of 2009. Freehold sales were down by 10,41% to 116,930 transactions. Sectional title sales were down by 8,32% to 64,725 sales and total sales were down by 9,68% to 181,655.

When considering overall GDP growth recorded during 2016 it is not surprising that the residential property market contracted the way it did. The question now remains as to what can be expected for 2017 . The first quarter of a year is typically a seasonal peak in sales and we can expect a busy first three months. The bargains are out there and waiting to be discovered.

For further information and an interactive analysis of this article follow my blog: andreaswassenaar.blogspot.com.

Andreas Wassenaar

Principal - Seeff Dolphin Coast

Cell: 082 837 9094

andreasw@seeff.com