It's full steam ahead for the SA property sector - especially in the Western Cape, where the deeds office has had to chip away at a massive lockdown backlog.
The Western Cape Deeds Office, Registrar of Deeds Kasavel Pillay has shared the following update on execution/registrations, data capturing, and information copies. The Cape office specifically has been dealing with a huge post-lockdown backlog, with the update detailing current day to day lodgements and the registrations currently in the system for many weeks.
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September's daily registration average was set at 933 deeds, according to the update sent out to industry stakeholders. August capturing rates where high with 15 672 deeds Captured from the 18 988 registered. The verification process saw a 52% rate for, with some 9 106 deeds carried over.
Deeds and lodged registered between 1-25 Sep 2020:
- Deeds lodged - 15 900
- Total deeds registered - 16 801
- Daily registration average - 933
Information copies:
- Information section is up to date with issuing of copies.
- Copies requested for 2008 and 2009 stored on a File director repository is a bit of a challenge at the moment. Copies stored therein is therefore not available. Our IT administrators however are working on the problem.
Data capturing and verification as at 23 September 2020
Capturing:
- May: 2074 deeds captured from the 2076 registered = 99,9% has been captured (1 deed to still be captured)
- June: 4155 deeds captured from the 4161 registered = 99,8% has been captured (17 deeds to still be captured)
- July: 11478 deeds captured from the 11490 registered = 99.9% has been captured (12 deeds to still be captured)
- Aug: 15672 deeds Captured from the 18988 registered = 82.5% has been captured (3316 deeds to be captured still)
Verification:
- May: 2071 deeds verified from the 2076 registered = 99,7% has been verified (5 deeds to still be verified)
- June: 4148 deeds verified from the 4161 registered = 99.7% has been verified (13 deeds to still be verified)
- July: 11408 deeds verified from the 11490 registered = 99% has been verified (82 deeds to still be verified)
- Aug: 9882 deeds verified from the 18988 registered =52 % has been verified (9106 deeds to be verified still)
With deeds processing aiming to get back on track, it leaves the industry wanting to ascertain exactly what the state of play is for the market. While some industry experts remain optimistic about a buyer's market others are convinced the situation is set for a turn in favour of the seller.
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The 'supply and demand' quotient
The combination of record-breaking low interest rates, excellent value for money on offer, and very motivated lenders offering up to 100% bonds to qualified buyers continue to stoke the 'supply and demand' quotient.
“When buyers have many properties to choose from, there is usually also downward pressure on home prices, which was essentially the situation in South Africa right up until January this year, which is when the Reserve Bank started dropping interest rates," says Gerhard Kotzé, MD of the RealNet estate agency group.
South African consumers have for a long time been trapped by the rising petrol, electricity and food prices. The effect of the 7% prime rate has meant those who are financially sound have flooded the market, with bond originators reporting up to 70% of their new bond applications were coming from young, first-time buyers.
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Top Real Estate agents continue to report exceptional performance in what has been one of South Africa’s most economically challenging years. After two months of record-breaking sales post hard lockdown, the Rawson Property Group says its transaction figures for August have done equally well.
As market momentum continues, however, Tony Clarke, MD of the Rawson Property Group. expects property prices to climb as a natural reaction to the increasing demand and decreasing oversupply.
“We’re hoping to see improvements in the economic growth rate, which will boost income, affordability and consumer confidence. All of this will contribute to the already high demand for properties, particularly within the low to middle price ranges, and help support stronger price growth in the months to come," says Clarke.
While robust performance further sets the seen for a seller's market, Kotze does not believe the South African property market is there as a whole. He notes sales in the higher price categories typically take much longer to respond to interest rate movements.
"But we are moving towards it, and that is reflected in the latest statistics from FNB, which show:
- That supply is still greater than demand but that the gap is narrowing as more and more homes are sold,
- That the average difference between the listing or asking price of properties and the price at which they are actually sold has actually declined from 13% in the first quarter of this year to 12% now, and
- That the average yearly rate at which home prices go up is currently rising at 1,4%, which is about double the rate at the beginning of the year.
Kotze remains optimistic that the Reserve Bank may well decide to lower rates even more later this year to try to stimulate the economy – a move he believes will "prompt more upgrading and more investment buying on the part of repeat buyers".
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He adds that many people who were going to sell have now decided to keep their homes and withdrawn them from the market, while at the same time, "there are remarkably few new home developments currently in the pipeline, so supply is likely to get even tighter. And if things do continue as at present, we believe we could be looking at a full-blown sellers’ market by this time next year".
Clarke agrees that all signs point towards continued market recovery.
“Growth is on the horizon – the market is full steam ahead – but it’s important not to pre-empt pricing conditions. Buyers and tenants are well-informed and spoilt for choice. They’re not interested in properties that aren’t appropriately competitive."
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