The fourth quarter FNB Estate Agent survey continues to depict a market tilted in favour of those buyers with financial resources at their disposal.

On average, the sample of estate agents surveyed in the fourth quarter perceived residential demand to have strengthened very slightly after some previous quarters of decline. On a scale of 1 to 10, the agent demand activity rating rose from the previous quarter’s 5.66 to a fourth quarter 5.79.

Seasonal factors are believed to have played a significant role in this, but there also exists the possibility that renewed interest rate reduction in September had a slight positive impact.

The agents surveyed continue to point to apparent unrealistic pricing in the market.

Estimated average time of properties on the market was still a lengthy 15 weeks and six days in the fourth quarter, which was slightly worse than the previous quarter’s 15 weeks and four days. While this is much better than in 2008 where the estimate neared 22 weeks, it would still appear far too long for an average, given that in the healthier market days of 2005/6 the average time was generally below two months.

Furthermore, the percentage of sellers having to drop their asking price remained almost unchanged from the previous quarter’s 81 percent, declining slightly to 80 percent, and the average price drop for that majority having to drop their prices was estimated at -11 percent.

Examining the composition of buying and selling in 2010, we saw first time buyers increasing moderately in significance from an average of 15.8 percent of total buyers in 2009 to 17 percent in 2010.

There is a continued focus on essential buying, with primary residential buying increasing its share from 82.3 percent of total buying in 2009 to 89.8 percent in 2010, at the expense of buy-to-let buying, holiday buying and buying residences for relatives.

Those sellers "selling in order to downscale due to financial pressure" has declined as a percentage of total selling, from 28 percent in 2009 to 20.5 percent in 2010. There was also a further slight decline in emigration selling as a percentage of total selling, from eight percent in 2009 to 7.5 percent in 2010 (following a 2008 shocker of 16 percent).

In a nutshell, agents believe 2010 to have been a better year for the market than 2009. However, the group still points to a mediocre and unrealistically priced market, and does not paint a convincing picture for further gains in 2011.

Article by: John Loos and Ewald Kellerman - www.iafrica.com