Bleak stats bode well for buyers

Unsurprisingly, the lockdown brought the property market to an abrupt halt, but with the Deeds Office open and agents working again, this dark cloud may have a silver lining



he national lockdown brought the local housing market to a standstill as the Deeds Office was closed during Alert Level 5 and most of Alert Level 4. This was worsened by the fact that real estate services were unable to operate until Alert Level 3. The result was historically low levels of activity for the second quarter of 2020.

87% fewer bonds

According to Lightstone Property data, a total of 5,792 bond registrations were recorded at the Deeds Office over the period of April to June 2020. This translates into an 87% decrease in the number of bonds registered year on year (YoY) and an 85% decrease quarter on quarter (QoQ). 

91% fewer transfers

Beyond this, the number of transfers (both bonded and unbonded) recorded at the Deeds Office between April and June amounted to 5,941, which is a 91% decrease from last year and an 88% decrease from the first quarter of this year.

“These numbers aren’t surprising considering that no transactions were processed at the Deeds Office during most of April and May. However, the results for June provide a glimmer of hope that activity will slowly return to normal now that lockdown restrictions have eased,” explains Adrian Goslett, regional director and CEO, RE/MAX of Southern Africa.


Sectional title schemes hit harder

Following the trend from the previous quarter, sectional title schemes continued to be worst affected by the lockdown in the second quarter (Q2) of the year. Reflecting a significant decline, the national median price of sectional title units, according to Lightstone Property, dropped by 8% to R953,084 from the R1,032,045 reported in Q2 of last year and by 1% since the first quarter (Q1) of 2020.  

Freehold homes reflected a current national median price of R1,109,852, which is a 3% decrease on the median asking price for Q2 last year (R1,148,167), Lightstone indicates. When compared to Q1 2020, the median asking price decreased by 6%. 


Average bond amount 10% lower

“The average bond amount granted during this period similarly decreased by 10% since last quarter to R990,000 and by 10% since Q2 2019 (Lightstone Property). This could be the result of the drop in demand and the slight downward pressure on property prices,” says Goslett.

Of the 5,941 transfers, a total of 3,869 freehold properties and 1,105 sectional title units were sold countrywide (these figures exclude estates, farms, and land only transfers). The number of freehold properties sold decreased by a whole 88% YoY and 84% QoQ while sectional titles saw a shocking 94% decrease YoY and 92% QoQ. 


Luxury market shrinks

Properties below R400,000 continue to account for the largest portion of sales at 32.4% of all transfers, Lightstone indicates. Properties between R400,000 and R800,000 make up 25.4% of all transfers, which is slightly less than the 26.9% that properties between R800,000 and R1,5m account for. 

Properties between R1,5m and R3m accounted for 12.2% and, making up the smallest portion of transfers, properties priced above R3m accounted for just 3% of the total. This segment of the market dropped by 2% from its usual 5% market share. 

Provincial performance

According to stats provided by Private Property, property prices in the Free State were the least affected by the lockdown. The median asking price grew by 12% YoY to R1,199m in Q2 2020 from R1,07m in Q2 2019. 

Slow growth

According to Goslett, the results of the second quarter were predictable. “We knew we would see very low levels of activity and house price appreciation. It ’s now a matter of waiting to see how quickly the housing market recovers at Alert Level 2. I predict slow corrective growth for the next quarter provided there are no further surprises as this pandemic unfolds. 

“I cannot stress enough how large of an opportunity the current housing market presents to investors at this time. With interest rates at a historic low and with downward pressure on house prices, investors stand to make great returns on investment by purchasing property now,” Goslett says. 

Pin It on Pinterest

Share This