Housing price inflation in the province remains stubbornly under the national average, with Johannesburg the worst.
JOHANNESBURG - Gauteng's housing market is in the doldrums.
Home owners looking to sell their properties in the country's economic heartland are being forced to slash their prices.
Pam Golding's 2019 Residential Property Report makes for tough reading if you're in Gauteng.
Housing price inflation in the province remains stubbornly under the national average, with Johannesburg the worst.
This is corroborated by Firzt Realty CEO, Denese Zaslansky, who says sellers in Johannesburg are having to settle for far less.
"It's a cross-section of the market. Whether they paid R1-million or R10-million three or four years ago, we are selling at between 20% and 30% less," says Denes Zaslansky, Firtz Realty.
What's behind this?
"With what's happened in the economy and with the crime situation, we've found that the prices have definitely diminished since 2013 or 2015," Zaslansky said.
Worryingly, Pam Golding's report states that over the last two years, those leaving our shores accounted for 13.4 percent of properties sold… a 10-year high.
Zaslansky says, in her experience, it's slightly lower.
"About 7% to 8% of our sellers are emigrating. I speak to a lot of conveyancers, they are dealing with people who are emigrating and perhaps in their businesses it could be more than 10% or 15%," she said.
It's definitely a buyer's market. A recent FNB Property Barometer report shows that more than 90 percent of homes sold over the last three years went for below the asking price.
In Gauteng, 'for sale' signs are everywhere. Pam Golding says, on average, homes stay on the market for almost 14 weeks. Firzt Realty is experiencing the same.
"We find we're selling the property in about 100 to 110 days on sole mandate. On an open listing, where you have many agents selling, that figure goes up to about 130 days," Zaslansky said.
The eternal optimist… she says the market will bounce back.
"I'm sitting here and I'm sure you'll talk to me in five years' time and I'll tell you: I told you so, will escalate in five years' time," she said.
Pricing takes several factors into account, but primarily, it's about supply versus demand.
"There is still excess stock in the market so we need to clear out that stock first before that translates into stronger house price growth," said Siphamandla Mkhwanazi, FNB Economist.
All of this is great news for buyers, especially since banks have increased appetite for lending at the moment, with some giving bonds of up to 108 percent.
