Those looking, as always, for signs of improvement in the residential property will, said Bill Rawson, Chairman of the Rawson Property Group, be encouraged by the latest FNB Barometer figures. These show that since the first time in 2007, when the relevant question in their survey was first introduced, there has been an upturn in the number of people selling with the intention of upgrading. The percentage of people doings this, said Rawson, has in fact risen from 14% to 16% - “not a big jump, but nevertheless a definite step forward”.
Conversely, said Rawson, the percentage of people selling to downgrade has reduced from 18% to 15% of the total.
“We are,” said Rawson, “a long way off the scenario which we all became accustomed to in the ‘good old days’, when the majority of sellers were doing so to upgrade. This scenario was the pattern from approximately 2002 to 2007. We cannot expect this to be repeated in the near future, but it is worth noting that in the sub-R1 million bracket steady price improvements are now evident and upgrading is far more common.”
Rawson said that the number of upgraders could, he believes, be very significantly increased if the banks took a more tolerant approach to their assessment of bond applicants.
“Many of those who now cannot get bonds,” he said, “would have qualified for them without difficulty in the old days – and it is worth commenting that those who are planning to upgrade are, in our experience, almost always the ones who are likely to prove to be the most successful in their business occupations and the most reliable payers.”
The banks, added Rawson, still have fairly large numbers of repossessed homes on their stock lists which they have to be ‘get rid of’ – but with the end of this process now in sight, it is possible that some of the financial constraints which the banks had to factor into their calculations will now be lightened.
“Let us hope that this is what will happen when repossessed stocks begin to run out,” said Rawson. “As I have said on many occasions previously, in effect, the banks do control the housing market and it will be them, not interest rates, subsidies or other factors, that will generate the more active market that so many people are now waiting for.”
