Summary of Estate Agents Survey results 1Q22
Market activity improved marginally from a rating of 6.5 (out of 10) in 4Q21 to 6.8 in 1Q22. This is on the back of a recovery in KwaZulu-Natal activity following the July 2021 riots and the seemingly strong activity in the Eastern Cape region. By price, this quarter’s activity was pushed higher by affordable segments, particularly the R500k-R750k sub-segment. Looking ahead, expectations of near-term activity (in the next three months) pulled back, with only a third of respondents (31%) expecting activity to increase from current levels, presumably factoring in higher interest rate expectations. Interestingly, however, agents in the affordable market still expect reasonable activity, with 55% expecting a further increase in activity in the next three months, versus 23% in the traditional market.
Average time properties spent on the market for sale remained unchanged at 8 weeks. This varied markedly across regions, with Western Cape (6 weeks, 3 days) and KwaZulu-Natal (6 weeks and 4 days) faring better. Gauteng recorded the longest time on market, at 8 weeks and 6 days. By price segment, the R1.3m-R2.6m bracket recorded the shortest time of 6 weeks and 4 days. At 8 weeks in 1Q22, time on market remains well below the post global financial crisis average (since 2009) of 14 weeks and 1 day.
Estate agents’ sentiment, as measured by the proportion of agents who are satisfied with prevailing market conditions, was unchanged at 76%. The KwaZulu-Natal region saw a further improvement in sentiment, from 62% to 75%, following a riot-induced 51% in 3Q21. At this level, sentiment in the province has fully recovered to the pre-riots’ reading of 72%. Notably, sentiment among estate agents that operate in affluent areas pulled back to 70%, from 80% previously, likely influenced by the ongoing war in Ukraine.
The reason for selling matrix remained broadly unchanged from the previous quarter and shows that sales due to financial pressure are still elevated at an estimated 18% of the market, while emigration-related sales remain stable at around 9%. This ratio, however, increases to 15% in the R2.6m-R3.6m and >R3.6m segments.