First National Bank (FNB) have released their latest Estate Agents Survey
- The 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.
Link to full survey summary HERE
Author: Bryan Groenendaal