Property Talk

I have at last come across national property transfer data, which provides exceptional insight into the level of property transactions nationally. This information provides an amazing perspective of our South African residential property market and the price ranges the bulk of transactions are being concluded within.

For the last 12 months ending October 2017, there were 230,345 registered transfers with a gross value of R234,5 bn. The two main price brackets of residential property transfers in South Africa happen in the R800,000 to R1,500,000 price bracket (25% or R58,98bn, represented by 53,012 sales) and the R1,500,000 to R3,000,000 (29% or R67,41bn represented by 32,684 sales). Consider that 54% of all transactions nationally fall within the R800,000 to R3m bracket. It is therefore not surprising that South Africa's mortgage originators and financial institutions survive by serving this core market.

On the lower end the R400,000 to R800,000 price bracket amounts for 15% of the market or R35,17bn in sales represented by 57,995 transactions. On the higher end of the market which has been defined as above R3,000,000, we find 11,556 sales to the value of R60,5bn or 26% of the market.

What I found very interesting is that from this R234,5bn in property sales over the past 12 months, the mortgage bond market delivered R149,6bn in total bonds registered for the period.

So who are the top mortgage providers in the country

The highest market share of these registered bonds went to Standard Bank with 24,6% and a value of R36,8bn in bonds, represented by 39,387 transactions. The average bond size is therefore R934,589 that Standard Bank did as market leader.

FNB did the second largest amount of bond business with 31,591 transactions at R30,68bn or 20,5% market share. ABSA was not far behind with 27,196 transactions or R25,64bn (17,1% market share). Nedbank was in fourth position with 14% market share or 19,075 deals or R20,88bn in value.

Specialist mortgage bond provider SA Home Loans did 14,033 deals over the last year with a value of R11,17bn and market share of 7,5% Certainly not bad for this type of specialist niche player.

What I also found interesting from this data is that a lot of switching in and out goes on between banks. The total mortgage bonds switched in from other banks was R11bn or 7,575 transactions. Most of the banks have a similar number switch in than switch out, except for Investec.

For some reason R2,18bn or 862 clients switched to Investec and only 166 or R393m switched out of Investec. This indicates that Investec are following a clear strategy to convert clients from other banks, which makes perfect sense.

The higher service level delivery of private banking would appeal to the higher end market of the traditional commercial banks and it appears from these stats that Investec is having some success with that strategy.