Coastal areas to recover first

09 Oct 2009 Property24
Housing markets of coastal cities are likely to bounce back sooner than that of their inland counterparts, latest data from industry players suggest.The FNB Residential Property Barometer released earlier this week shows that confidence or activity levels (measured mainly by show house attendances) improved more dramatically in Cape Town, Durban, Port Elizabeth and East London than in Johannesburg and Pretoria in third quarter 2009. In fact, activity levels in all four coastal cities are now at two-year highs.FNB's latest quarterly survey was undertaken in mid-August, following the most recent rate cut by the SA Reserve Bank, which totals 500 basis points since December 2008.The barometer measures the perceptions of market conditions among a large sample of estate agents across all major cities on a scale of one to ten. Durban recorded the highest activity levels in the third quarter with a score of 5.86, followed by Cape Town, Port Elizabeth and East London, all with scores of 5.82. Tshwane (Pretoria) and Johannesburg lagged at confidence levels of 5.76 and 5.47 respectively.FNB property strategist John Loos says coastal residents are clearly now more optimistic about property market prospects than their inland counterparts. However, Loos says although the rebound of coastal housing markets generally appear to be stronger than that of inland areas, there are certain sub-regions of Greater Johannesburg and Pretoria where a recovery is already well under way. For instance, Johannesburg's East Rand suburbs of Benoni, Boksburg and Brakpan recorded average price increases of 2,7% in the second quarter y-o-y while Nigel and Springs saw prices rise 3% over the same time. Latest housing data from Lightstone support the notion that coastal housing markets may recover at a faster pace than that of their inland counterparts. According to Lightstone's housing index for September 2009, Port Elizabeth in the Eastern Cape is leading the national housing recovery with prices already up 4.3%. The housing markets of Durban and Cape Town followed with price declines of -1.1%, and -1.5% respectively while Johannesburg and Tshwane lagged with drops of -2% and -4.1%. – Joan Muller