Inactive market main cause for slump in sector

In a quarterly survey conducted by FNB on estate agents’ view of the local real estate market it was revealed that there is a slump in the trading environment.
Thomas Slabbert, FNB, Head of Home Loans at the recent Estate Agents awards dinner by FNB Namibia said, “When estate agents were asked to rate the trading environment on a scale of 1 to 10, where 1 is very inactive and 10 is very active, they gave an average score of 2.3 out of 10. Therefore, based on estate agents sentiments the trading environment continued to deteriorate.”
Slabbert said some of the reasons quoted were that more and more estate agents enter the market. 79% of the respondents rated the trading environment as very inactive and gave the lowest possible score of 1. This is also the lowest activity score for the past two years.

He stated that according to the survey, properties spent 90 days on average on the market, which is considered quite long, taking into account that it is an under supplied market. According to the survey, however, pricing seems to have improved as 92% of the properties sold within 10% of the original asking price.
“The few stubborn sellers who continued to over-price their properties found that their properties took 275 days longer to sell than the market average. Sellers in general are becoming more flexible on price, with properties selling on average 5% below the asking price and for the second consecutive quarter, house prices have traded below the original asking price. This shows that sellers are beginning to lose their price leverage in the market or alternatively buyers can now negotiate prices downwards a bit more aggressively as foreign investors begin to search for more lucrative property markets elsewhere due to the improved global house prices,” continued Slabbert.
Slabbert concluded that FNB Namibia also offered and promoted the affordable housing segment and not just mainstream home loan offerings.