FNB’s Residential Property Barometer for July 2021 indicates that demand in the property market is stabilizing following its strong rebound in the second half of 2020 and into 2021.
Key themes found in FNB’s latest Residential Property Barometer:
Our proprietary market strength indicators show that demand is now moderating, following a strong rebound in 2H20 and into 2021. However, these remain above pre- pandemic levels, in part reflecting the positive effect of lower interest rates on market activity. Current activity also reflects pandemic-induced shifts in consumer behaviour: with the greater adoption of work-from-home and homeschooling, households had to re- evaluate their housing needs, which leant in favour of home ownership. The FNB Estate Agents Survey shows moderating near-term activity expectations. As expected, these vary markedly across segments, with the affordable market more upbeat. Liquidity remains intact: mortgage extension continues to grow at a faster pace, and loan-to-price ratios remain high. Our investigations show that much of this credit is funding purchases in the middle- to upper-priced segments. Longer-term demand fundamentals remain a constraint: the latest data shows a slow re-adjustment in labour markets, which could weigh on wage income growth. However, we note a potential upside on non-wage income, especially dividend income, which could ameliorate income growth for upper-income households. You can read FNB’s Residential Property Barometer for July 2021 here.
Best to all, Margie, Clare, Fiona, Terry, Alison & Jane