PROPERTY BAROMETER

FNB Estate Agent Survey – Buy-to-let Buying and Rentals

Buy-to-let home buying percentage stalls

After having edged up gradually in prior quarters, the 3rd Quarter 2014

FNB Estate Agent Survey pointed to a stalling in Buy-to-Let buying as a

percentage of total home buying. Agents surveyed still expect mild increase

in buy-to-let buying in the near term, but their expectations regarding the

magnitude improvement continue to taper.

 

The 3rd quarter 2014 FNB Estate Agent Survey pointed to a slight decline in

the significance of buy-to-let buying in the market, after prior quarters’

increases.

 

By this we mean that, as a percentage of total buying, buy-to-let purchases

are estimated by survey respondents to have edged down slightly from 10% in

the previous quarter to 9% in the 3rd Quarter. The decrease in the percentage

of buy-to-let buying stalls a previous small rising trend.

 

This percentage remains mediocre in comparison to the estimated 25% back

in early-2004 at the height of the property boom. Besides widespread

household financial constraints still being in existence, and often only

“masked” by very low interest rates at present, ongoing mediocrity in buy-tolet

buying is probably explained by the rental market’s strengthening to date

having remained modest, interest rates having started to rise, and tenants

having limited means in the currently tough economic environment.

 

Nevertheless, the buy-to-let percentage remains elevated from its lows of

around 2010, and this in a higher volume market too, so some mild

cumulative improvement has been achieved in recent years. This improved

situation has been supported by low interest rates, an improved period of

house price growth through 2012/13, with a portion of home buyers arguably

focused heavily on capital growth prospects as they perceive it, and not solely

on the rental income stream, and an improved tenant payment performance.

Engel & Völkers

Pretoria New East
Shop 8, Chamberlains Centre, Corner Solomon Mahlangu & Bendeman Drive
0081 Silver Lakes, Pretoria
South Africa
Phone
+27 12 809 2205

To the shop



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