Neville Berkowitz, property economist and adviser to HomeBid, says Durban saw the biggest drop in home sales activity levels at -10.7%, followed by East London at -9.7%, Cape Town at -9.5%, the East Rand at -9.0%, and Port Elizabeth at -7.9%.
This is according to Neville Berkowitz, property economist and adviser to HomeBid, who says Durban saw the biggest drop in activity levels at -10.7%, followed by East London at -9.7%, Cape Town at -9.5%, the East Rand at -9.0%, and Port Elizabeth at -7.9%.
Johannesburg, at -6.1%, proved to be the average drop of the top nine sales areas, with Bloemfontein at a small drop of -1.6%. Only the Vaal Triangle at +0.8% and Pretoria at +0.2% saw slightly more sales and transfer activity in 2015 compared to 2014.
“We expect the sales and transfer activity levels to drop further during the second half of 2015 as economic conditions are deteriorating, consumer confidence levels have hit 15-year lows, and interest rate increases are predicted to rise by between 0.25 to 0.5% per annum before the end of the year,” says Berkowitz. HomeBid’s analysis of some 136 000 homes transferred in the various Deeds Offices during the first half of 2015 shows that, contrary to popular belief, Johannesburg’s average home prices at R1 566 017 are higher than Cape Town’s at R1 492 551, and Durban is only slightly behind Cape town at R 1 448 251. Berkowitz says Pretoria and Bloemfontein, buoyed by increasing public sector employment levels, are averaging R1 042 899 and R981 205 respectively.
The East Rand acts as a feeder dormitory area to the commercial and industrial powerhouse of Africa located between Johannesburg, East Rand, Vaal Triangle and Pretoria, and their average home prices at R1 027 389 is 34.4% cheaper than living in Johannesburg.
The Eastern Cape has the two cities of East London and Port Elizabeth in the top nine areas, and with East London at an average home price transferred at R821 039, it is 24% more expensive to live in than Port Elizabeth at R 661 552.
In fact, he says Port Elizabeth is the cheapest area to live in among the top nine metro areas monitored by HomeBid, and for those who live there offers a great quality of life, providing you have stable employment. An average home in Port Elizabeth costs R904 465 less than the average home in Johannesburg, and R831 000 less than Cape Town.
“We believe that by providing the public with factual Deeds Office information which we analyse, they can be appraised of actual property market conditions and not simply wishful thinking by other commentators talking the market up for their own purposes,” says Berkowitz. Times are tough, and they are soon to get a lot tougher, he says. Externally, right now the Greece “no vote” and the main Chinese stock market prices crashing by over 30% are going to negatively affect foreign investors’ sentiments towards emerging economies, of which South Africa is one.
“This could see our interest rates rising sooner than expected to protect our slowing economy from losing foreign funding that is currently propping it up,” he says.
“I have been in the property market since 1973 and I have seen numerous upswings and downswings, and make no mistake, we are in a downswing.”
The public needs the transparent facts so they can make correct decisions about buying, selling or staying in their current home, which invariably is their most valuable asset, says Berkowitz.