WSP unveils £591m takeover move, FTSE 100 steady
Professional services giant WSP today unveiled a takeover swoop worth £591 million for London-listed firm RPS.
The move for RPS, an Oxfordshire-based consultancy employing 5,000 staff across property, energy, transport, water, defence and government services, was delivered at a hefty premium of 76% to last night’s closing price. RPS’s project management portfolio includes work on the Woolwich Exchange regeneration scheme.
WSP, whose engineering services have been used to help deliver the net zero targets of Western Europe’s second tallest building at 22 Bishopsgate in the City, is listed on the Toronto Stock Exchange and is worth around £12 billion.
Its other recent deals have included John Wood’s environment and infrastructure business for $1.8 billion (£1.5 billion).
Shares in former FTSE 250-listed RPS jumped by 87p to 204p after its board backed WSP’s proposal.
The developments came as investment bank Peel Hunt reported a further slowdown in UK takeover activity after 2021’s record year.
It said that 30 UK companies are currently under offer, reflecting a flurry of action in the natural resources sector but still lower than 38 at the end of June as rising interest rates and the uncertain outlook cool interest in merger and acquisitions.
The lack of takeover activity hasn’t impacted the recent performance of the FTSE 100 index, which continues to be near its highest level in two months after adding 6.84 points to 7489.21 today.
Companies with momentum include London Stock Exchange and investment platform Hargreaves Lansdown, with their shares up a further 2% and 1% after results on Friday boosted confidence.
The FTSE 250 index eased 18.57 points to 20,099.87, with defence technology company Qinetiq up 2% or 7.4p to 388.2p after following Friday’s acquisition of US-based Avantus Federal with a $45 million (£37.2 million) contract win.
Shares in serviced offices provider IWG fell 11% or 22p to 171p despite the benefits of hybrid working helping the former Regus business to narrow half-year losses.
Revenues grew 23% year-on-year but IWG is also facing inflationary pressures on employment costs and utilities as well as accelerated investment.
Since it began in the spring of 2020, the COVID-19 pandemic has been affecting everything—including housing prices. Early on, several parts of the country had an influx of out-of-state buyers who were living in cities and looking for a bit more space. Their house prices went up, but recently, thanks to inflation and higher mortgage rates, homes in some areas are no longer commanding the record-breaking prices they were even a few months ago.
According to a report from Realtor.com, these are the 10 cities where sellers are reducing home prices the most.
1. Reno, Nevada
Median home list price: $677,500
Percentage of listings with price reductions: 32.6%
- Between March 2020 and June 2022, house prices increased more than 30%
2. Austin, Texas
Median home list price: $620,000
Percentage of listings with price reductions: 32.4%
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- Between March 2020 and June 2022, house prices shot up more than 66%
3. Phoenix, Arizona
Median home list price: $548,500
Percentage of listings with price reductions: 29.5%
- Between March 2020 and June 2022, house prices increased more than 35%
4. Anchorage, Alaska
Median home list price: $436,00
Percentage of listings with price reductions: 28.5%
- Between March 2020 and June 2022, house prices increased more than 36%
5. Boise, Idaho
Median home list price: $587,900
Percentage of listings with price reductions: 27.4%
- Between March 2020 and June 2022, house prices increased more than 53%
6. Ogden, Utah
Median home list price: $580,100
Percentage of listings with price reductions: 27.4%
- About 40 minutes outside Salt Lake City, but homes cost roughly $50,000 less
7. Sacramento, California
Median home list price: $642,500
Percentage of listings with price reductions: 25.2%
- Between March 2020 and June 2022, house prices increased more than 22%
8. Colorado Springs, Colorado
Median home list price: $550,000
Percentage of listings with price reductions: 25.1%
- About an hour outside Denver, but homes cost roughly $130,000 less
9. Evansville, Indiana
Median home list price: $246,000
Percentage of listings with price reductions: 24.7%
- Between March 2020 and June 2022, house prices increased more than 43%
10. Medford, Oregon
Median home list price: $562,500
Percentage of listings with price reductions: 23.2%
- Between March 2020 and June 2022, house prices increased more than 28%
Rising interest rates continue to have an effect on the housing market in Waterloo Region as home prices fell for a fifth straight month, according to the newly formed Waterloo Region Association of Realtors.
“In the wake of July’s interest rate hike, home sales in Waterloo Region continued to slow,” says Megan Bell, WRAR president.
“We’re seeing a clear shift in the market and what people can afford to purchase or are willing to pay. On the bright side for buyers, it’s not the extreme sellers’ market it was.”
The new group, which is an amalgamation of the Kitchener-Waterloo and Cambridge associations, says the average price of buying a home across the region fell to $752,301.
Similarly, the average cost of buying a detached home is down to $842,241, which the realtors say is down six per cent from last July and seven per cent from June.

WRAR says 550 homes changed owners across Waterloo Region in July, which is down around 32 per cent from last July and the previous five-year average for the month.
Bell says the real estate picture in the area is similar to trends occurring across the province.
“The real estate market is cooling across the province, and we are seeing significantly fewer buyers from the GTA, which is also impacting prices,” Bell says.
“However, this is not entirely bad news since the previous market was not sustainable. We are all keenly aware of the issues relating to affordability of not just purchasing a home, but rentals as well, and there is clearly more work to be done.”
Despite the sluggish sales, new houses are still being listed at a high rate as there were 1,174 new listings, a 34 per cent increase over last July and a nine per cent increase over the previous 10-year July average.
Perhaps the most telling statistic for the market’s downward trend was the fact that there were 1,283 homes on the market at the end of July, which is a 215.2 per cent increase over July 2021.
© 2022 Global News, a division of Corus Entertainment Inc.
The University of The Gambia (UTG) in collaboration with the African Regional Intellectual Property Organization (ARIPO) and the Registrar General of The Gambia at the Ministry of Justice on Tuesday convened a two-day seminar on intellectual property.
The seminar was designed to raise awareness among staff and students of academic institutions and contributors to innovation in The Gambia on intellectual property.
The event was held under the theme – ‘Fostering Creativity and Innovation for Economic Growth and Development in Africa.’
Speaking at the event, Dr Muhammed Lamin Sanyang, Director of Research and Consultancy at UTG, on behalf of the Vice Chancellor, said that in a low-income country like The Gambia, the role of research in an academic institution is significant for its sustainability and development, and it is imperative to have knowledge-driven growth-based on innovation to boost the country’s economy.
“The quest for knowledge advancement is the basic principle behind research. The quality of research work directly translates into the quality of teaching and learning in the classroom, thereby benefiting the students, the society, and the country.” he said.
The University of The Gambia, he said, should serve as a role model in innovations like that and the research department should take the lead.
“For any University to contribute meaningfully to national development and provide practical solutions to real-social problems, it is important to elevate research and innovation to a position of high strategic importance within its core function, hence under my leadership, UTG would continue to prioritise research and innovation as crucial components.” he added.
Pierre Gomez, Minister of Higher Education Research and Technology (MoHERST), outlined the importance of intellectual property, saying his Ministry recognises the fact that innovation plays a fundamental role in building solid foundations to promote businesses and industries.
“And conscious of this, we are providing the policy environment that fosters innovation and to strengthen research and development capacities of developing countries to enable an economy based on human talent that generates higher value-added growth.”
Ahmed Ibrahim, Senior Examiner ARIPO, acknowledged that The Gambia is the second African country to conduct this type of seminar, challenging participants to take the sessions seriously to make changes in economic growth.
Dawda A. Jallow, Attorney General and Minister of Justice, said the Ministry is on track in developing the IP laws that contradict international standards.
“There is already a bill which has been approved by the cabinet and ready to be tabled at the National Assembly.”
The bill, he said, takes into account new trends in the file of intellectual property, adding that ‘if this bill’ is enacted it would significantly bring positive changes to the intellectual landscape in the country.
Danira Ford is a lifelong resident of New Orleans, Louisiana. Like tens of thousands of the city’s inhabitants, she has struggled to find an affordable place to live for her and her five children.
“Affordable housing would bring stability,” she said.
“My kids can’t play sports, be in band or get tutored on their homework because mommy needs to pick up extra shifts to cover rent,” Ford continued. “An affordable home would let them live more like normal children.”
A 2018 report by the United States Department of Housing and Urban Development (HUD) estimated that 80% of New Orleans households pay more for housing than they can afford. The Greater New Orleans Fair Housing Action Center recently estimated that 30,000 families in the city are languishing on a waitlist for an affordable housing voucher from the Housing Authority of New Orleans. By issuing a voucher, the city is agreeing to pay up to a certain amount of the voucher holder’s rent.
But the problem extends far beyond New Orleans. In a May 2022 news release on the Biden Administration’s housing supply action plan the White House said that while estimates vary, financial research company Moody’s Analytics estimates that the shortfall in the housing supply is more than 1.5 million homes nationwide.
In a 2021 white paper “Overcoming the Nation’s Daunting Housing Supply Shortage,” by Moody’s Analytics, co-authored by Jim Parrot, a nonresident fellow at Urban Institute, and Mark Zandi, chief economist at Moody’s, the U.S. has less housing available for rent or sale now than at any point in the last three decades.
As federal, state and local officials search for solutions, an ongoing affordable housing crisis is having real effects on residents.
Ford and her family, for example, have been waiting for an affordable housing voucher for more than a decade. Without it, she has cobbled together only enough money to live in the farther reaches of the metropolis, away from many of its amenities.
“It’s far from my work, it’s far from my kids’ schools, it’s far from grocery stores, it’s far from public transportation, it’s far from friends,” Ford said. “When it’s all you can afford, what choice do you have? But, also, what kind of life is it?”
Getting pushed out
Since the onset of the coronavirus pandemic, potential homebuyers and renters across the U.S. have seen real estate prices skyrocket and the supply of available units plummet. According to a Pew Research Center study last year, 85% of Americans said availability of affordable housing was a problem in their community. Forty-nine percent of respondents indicated it was a major problem, up from 39% just three years earlier.
According to HUD, housing becomes a problem when a household spends more than 30% of its income on home-related costs. This is known as “cost burdened,” a designation that applies to nearly 1 in 3 Americans.
Exacerbating the problem, Real Estate brokerage company Redfin found rent has risen sharply over the past two years, as much as 40% in some metro areas, while according to data this year from the U.S. Bureau of Labor Statistics, real wages — or the amount workers earn relative to inflation — has actually fallen by 1.2% since the end of 2019.
Workers can no longer afford to purchase or rent homes in the neighborhoods they once could.
“The result is that thousands of residents — mostly people of color — get pushed farther and farther outside of desirable neighborhoods,” said Maxwell Ciardullo, director of policy and communications at the Louisiana Fair Housing Action Center.
Evidence of the trend isn’t hard to find in New Orleans. Just east of the city’s famed French Quarter, the Bywater neighborhood was once considered a dangerous area, a perception that helped keep rents low. Over the past 20 years, however, helped in large part by its faring better than most during Hurricane Katrina, the Bywater has seen one of the area’s most rapid increases in home and rental prices.
“And that’s resulting in a demographic shift,” Ciardullo told VOA. “In the year 2000, the census tract that encompasses most of the Bywater had 74% Black residents. Just 20 years later, that was down to 37%.”
Multifaceted problem
A crisis of this magnitude stems from many causes.
The white paper blames the shortage of affordable housing primarily on the 2008 financial crisis. In the years that followed, a shortage of land, lending, labor and building materials drove up the cost of building new homes. This cut into contractors’ profit margins and reduced their incentive to build.
The coronavirus pandemic exacerbated the problem as more Americans sought larger homes where they could telework and live comfortably during lockdowns.
“In New Orleans, we were certainly experiencing these issues,” Ciardullo said, “but we also had some unique challenges, such as an aged housing stock and a lot of gentrification.”
“You used to be able to buy a home for really cheap,” said Alton Osborne, co-owner of the Bywater Bakery. In the 1990s, he bought a home in the neighborhood that he still owns today.
“They were blighted, but at least they were affordable,” Osborne said. “Nowadays, you have a lot of people who moved here from out of town and bought those homes, rehabilitated them, and now they’re worth a lot more. Is it a good thing? Is it a bad thing? It’s complicated, but what’s certain is a lot of people don’t have enough money to live in this neighborhood anymore.”
Short-term rentals
One of the most high-profile reasons for New Orleans’ lack of affordable housing is the prevalence of short-term rentals, through Airbnb and other services, popular with the throngs of tourists who visit the city.
“In the Bywater, you’ve got entire blocks now taken over by Airbnb,” Osborne said.
According to the Inside Airbnb website, which looks at the rental service’s impact on communities, the city has more than 5,500 short-term rental units on Airbnb alone — dwellings that could otherwise go to local tenants. Renting to tourists at high prices also tends to drive up the rents on other types of units.
It’s simple math, according to Bywater Neighborhood Association President John Guarnieri.
“A landlord can make a ton more money renting short term on something like Airbnb than they can by renting to locals with a long-term lease,” he said. “It’s not even close.”
New Orleans City Council has worked in recent years to combat the problem by passing laws regulating how much of each property can be used as a short-term rental, as well as limiting the number of guests allowed per unit. Additionally, fees from each booking are used to contribute to a citywide affordable housing fund.
“It’s a good and important step,” said Ciardullo, “but enforcement has been severely lacking so far.”
In addition to attempting to regulate short-term rentals, lawmakers across the U.S. have sought to address the affordable housing crisis with proposals as varied as raising the minimum wage, mandating rent control, subsidizing affordable housing and pursuing partnerships with developers.
In New Orleans, the City Council passed a zoning ordinance that allows the construction of larger buildings if a percentage of those units are made available at affordable prices.
Policies like these can take years to bring about tangible results, but several large projects in the Bywater are said to be close to breaking ground. But forcing change in a neighborhood can trigger resistance from existing residents.
“As neighbors, we’ve learned to fight back against so much development,” said Julie Jones, president of the Neighbors First for Bywater organization. “It’s just too much for one neighborhood to be expected to take. We like our Bywater as it feels now.”
Jones is far from alone. As each housing project is announced, more residents seem to worry about its effect.
For example, a plot of land awaiting development into a 90-unit mixed income residential building currently serves as a de facto park for the community. As the project’s groundbreaking nears, neighbors bemoan the eventual loss of this greenspace.
New Orleanian Danira Ford just shakes her head.
“I understand they enjoy that space,” she said, “but for families like mine, affordable housing like this would change our lives. We’re not talking about a park. We’re talking about a home and a new and better life.”
The 41-year-old controls Country Garden Holdings, China’s largest real estate developer by sales. Her stake was largely transferred from her father Yang Guoqiang, who founded the company in Foshan, Guangdong province, in 1992.
Country Garden is also facing growing liquidity stress. On Wednesday, the developer announced it would sell stocks at a nearly 13% discount to raise HK$2.83 billion ($361 million), compared to its Tuesday’s closing price.
Some of the proceeds will be used to repay the company’s offshore debt, it added.
“The mortgage boycotts are a double threat to developers and to the housing market,” said analysts at Capital Economics in a report on Wednesday.
They have drawn attention to the problem of cash-strapped developers being unable to complete properties that they have already sold, which is “putting off new homebuyers.” The boycotts have also made banks more cautious about issuing mortgages, which could dent property sales further, they added.
In a report earlier this week, S&P Global Ratings estimated China’s property sales could drop by a third this year because of mortgage strikes, as people believe developers won’t be able to complete presold units in time— the most common way they sell homes in the country.
“Without sales, many more developers will collapse, which is both a financial and an economic threat,” said Capital Economics analysts.
Aerial of Nexton Master-Planned Community, where a new built-for-rent single-family neighborhood is … [+]
The hottest trend in real estate is the built-for-rent single-family home business (”BFR”), but now that mortgage rates have doubled, the stock market has gone bearish, home sales are crashing, and the talk of possible recession is on the wind, investors in this segment are asking more questions about potential risks. There are some legitimately worrisome new trends, so some of the issues and concerns that are being raised are quite appropriate, while others are based upon some misconceptions. This article is meant to address both.
The Most Frequent Question: Rent Growth
One question that investors are asking now is “will rents drop as home prices slide backwards?” One thing is for sure: the recent (15%-20%) rates of single-family rent escalation cannot be sustained, even though the incomes of new-lease-signers have risen rapidly over the past two years. We expect rent gains for the next few years to be a fraction of the rates of increase of this year and last, but, supported by strong income growth among renters, we still contend that 5%-6% rent growth is still likely in most parts of the country. Any underwriting that includes continued double-digit increases in 2022 or 2023 would be decidedly unrealistic and risky, but low-single-digit increases are still in the cards.
One bullish indicator that substantiates the prediction of further rent growth is renters’ incomes. Their incomes have been rising more rapidly than the incomes of the overall population. This partly reflects the fact that people in the typical renter age groups (Millennials and Gen Z) have been advancing in their careers, as people often do when they leave their 20s and age into their 30s. Renters’ incomes have risen by 7.1% so far in 2022, and we’re only halfway through the year, according to a new report from RealPage.
Based upon this, my expectation is that renters’ incomes will probably be up 10%-12% for the entire calendar year of 2022. There is room then for further rent increases — RealPage data furthermore shows that market-rate renters are currently spending 23% of their income on rent, which is well below the 30-33% affordability ceiling.
Part of the rate of increase in incomes may be attributed to former home shoppers who recently decided not to purchase, and who decided to rent, but most of the increase is attributed to career growth. The RealPage study found that the age of renters has not increased, showing that the bulk of the increase in incomes is not due to former home-shoppers deciding to rent; they would typically be older than the average renter.
Some analysts have raised the alarm that rents have risen in some Sunbelt markets to above what local incomes can sustain. Those data exercises do not take into account the fact that much of the surge in demand in those markets (most notably in Florida, Texas, and the Carolinas), is coming from non-local incomes, typically from states with much higher levels of income and higher income taxes. That said, there are some single-family rentals now listed on Zillow in Phoenix that are showing rent reductions, and some national single-family rental companies are cancelling pending acquisitions and a few are selling some of their holdings. This all bears some close monitoring.
It is also worth noting that there are two parts to the question of rent growth. There is the likely movement of rents in the overall market, and then there is the potential for rent escalations for an individual BFR development. Rent escalations for most BFR projects will likely exceed the average rate of increase in the market they’re in. This reflects the “filling in” of the development with people, making it feel more like a living neighborhood to prospective renters who are touring it. Also, if there is an amenity such as a clubhouse and pool, rents in a given development typically get an extra boost once the recreation center is open.
Impact of Lower Home Prices on BFR
Some are concerned that as home prices go lower, that will drag rents lower, just as rising prices over the past few years dragged rents upward. This is a possible threat, as the homebuilders are now offering concessions and discounts. Mitigating this threat is the way that would-be homebuyers respond to such discounts. When a builder is lowering prices each month, the buyers tend to put off the purchase, possibly staying in the rental market for another year or two, so that they can re-enter the purchase market after home prices have stabilized. The householder figures, “why buy now, when I can wait a year and get the same house for $50,000 less?” Newly-built homes in rental single-family communities allow them to do that without giving up the single-family lifestyle. In that sense, builder price cuts will likely feed demand for BFR developments.
This will be an increasingly prominent story in the coming weeks. When builders start cutting prices, not only do would-be buyers stop in their tracks, but buyers who are already under contract to purchase a home often cancel the contract. They see the price being lowered on the same exact model in the same subdivision, and they feel they are about to overpay. When a buyer falls out of contract, the builder has another inventory unit they need to sell, and that unit will be much harder to sell in this environment. Expect to see increased cancellation activity in the months ahead as a result.
While home price declines are a possibility, particularly in the exurban areas that boomed during the worst days of the pandemic, this will not have a chilling effect on built-for-rent housing demand. It might be tempting to say that when home prices go lower in an area, people will revert from being renters to owners again, but the reality is that the monthly payment will still be higher than the cost to rent in many locations. That’s a direct result of the new mortgage rate environment, which is expected to persist. After all, the primary driver of declining home prices has been the effect of higher mortgage rates on the monthly payment.
The Pace of BFR Construction Will Continue to Chase Demand
Hunter Housing Economics’ national forecast is for an increase in BFR production from an anticipated 100,000 to 110,000 units in the year 2022 (even with an economic slowdown) to 150,000 new housing units a year over the next four or five years. That said, starts of homes in general are headed lower for the rest of this year and probably into next year, with the expected plunge being greater for f0r-sale housing, and much less severe for BFR home starts. After the economy recovers from its current cyclical weakness, assuming a mild recession starting sometime this year, the demographic drivers will again reassert themselves, driving demand toward 150,000 homes per year or higher.
Impact of Higher Cost of Capital
Another effect of higher mortgage rates is a higher cost of capital for developers and investors in the built-f0r-rent space. This applies not only to smaller investors who use debt but also to the large companies that use mortgage-backed securities. For example, Progress Residential has seen the interest rate it pays on its MBS issuances go from 2.2% in the summer/fall of 2021 to 5.3% in June of 2022. The higher cost of capital is already causing some BFR projects that “penciled out” to an acceptable rate of return at early-2022 interest rates to no longer be feasible today. Or at least the risk is viewed as too high. The takeaway is: choose locations carefully and do serious due-diligence. The investors in these communities will demand it.
As a result of this, there will be some BFR land deals that will get repriced at a lower land basis. This will be necessary to allow the yield on the investment to be high enough to make sense in a part of the cycle when money is no longer cheap.
Effect of Higher Mortgage Rates
While the cost of capital is the dark side of higher interest rates, higher mortgage rates could actually be a positive for rental demand. As mortgage rates edge higher, more buyers will find the monthly payment out of their reach, and more demand is expected to shift from ownership to rental demand. On top of this “renter-by-need” demand, there will be continued growth in “renters by choice.” It should be kept in mind that this “by-choice” group is much smaller than the “need” group. In many cases, they can be householders who are planning to buy a home and are only renting for a relatively short interim period. The “by-choice” group however is also a reflection of the fact that millennials are starting families now, and have much less of a bias toward ownership than prior generations (and they have now been in the workforce for more than a decade and can afford to spend more on their housing).
There has also been some discussion in the media recently about the possibility of overbuilding in the built-for-rent niche. Some analysts point to the $30 billion (at the low end) or $65 billion (some estimate $75 billion at the high end) worth of capital that is looking for land and development capacity all around the country for BFR. The reality is that not all of the capital that has actually been announced is likely to find an investment that is suitable, due to the scarcity and price of well-located land, and the recent shift of homebuilders away from building for rent. Capital is going to be much more selective in 2022 and 2023 than it was last year when the land rush was in full swing, and that will keep the currently undersupplied BFR sector from getting oversupplied anytime soon. Even if $75 billion is the eventual number, by 2024 or 2025, when BFR absorption is expected to be up to 150,000 units a year, that will equate to about a two-year supply, which is not problematic at an aggregate level.
Rising Interest Rates and Recession Risk
There is increasing concern of a potential recession in 2023, resulting from recent and expected future increases in interest rates. We expect built-for-rent projects to be much more resilient in the face of a possible slowdown than for-sale housing developments.
In general, weaker economic conditions force many people toward renting instead of buying. This tends to keep the rental sector relatively stable during downturns. There are some people who have to simply move in with relatives, but a much larger share of the market will rent. Also, there will be a rise in foreclosures, and that may add to demand for single-family rentals, as people who lose their homes typically look for a single-family home to rent.
Household formation rates are now back up to 1.5 million annually, which is above the pace of new home construction, likely to ease to 1.1 to 1.2 million going forward as the contracting economy causes more people to take a roommate or move in with relatives. Even at that lower level of household formations, demand for housing is expected to be sustained higher than production.
More households are being formed now that consist of single persons than roommates, which boosts … [+]
There has been concern expressed lately about the fact that growth in the adult population in the U.S. is slowing, and although that is true, that is not the most relevant metric. The largest subgroup in the population is turning age 27-31, and the 30-39 age group is the relevant one for built-for-rent. This segment of the population is starting to form families, and those young families are a prime audience for BFR. It should also be noted, with regard to the overall slowdown in population growth, that the limitations on international travel and migration during COVID played a causal role, and that effect will be temporary.
The composition of these new households is also turning out to be highly supportive of housing demand. Based upon Fed analysis of Census data (graph above), there has been a recent structural decline in the share of people “living with roommates/others” and a rise in other living arrangements, including “living alone.” This trend has generated increased headship rates (especially people in their 30s), and therefore increased demand for new residential units.
Headwinds and Hopes
There are new headwinds, and there are new concerns. That said, the BFR sector has a long runway ahead of it. Millennials will be forming more families in the years to come, and built-for-rent will be the best pathway to single-family living for many of them. Market due-diligence firms like ours are still getting a flood of interest in built-for-rent market studies, indicating that many firms are still seeing the potential outweighing the risks, or at least considering it worth giving it a careful look. That’s why I see continued growth in the built-for-rent sector for the foreseeable future.
Forecast of built-for-rent home production.
According to the Re/Max National Housing Report Q2 2022, the South African housing market performed surprisingly well during the second quarter, growing by as much 50% QoQ within certain sales metrics.
According to Lightstone Property data, a total of 52,949 bond registrations were recorded at the Deeds Office over the period April to June 2022. The Re/Max National Housing Reports reveal that this figure is up 30% on Q2 2021’s figures. The number of transfers (both bonded and unbonded) recorded at the Deeds Office for the second quarter amounted to 77,880. This amount is up by 49% on last quarter and up by 32% YoY.
Of the 77,880 transfers, a total of 37,287 freehold properties and 20,604 sectional title units were sold countrywide (these figures exclude estates, farms, and land only transfers). The number of freehold properties registered increased by 26% YoY and by 42% QoQ. Sectional titles increased by 40% YoY and by 50% QoQ.
According to regional director and CEO of Re/Max of Southern Africa, Adrian Goslett, these figures are unprecedented considering that activity was expected to drop owing to the higher interest rates.
“In the first quarter of the year, we already noticed activity subside following the first interest rate hike announced in November 2021. However, somewhat inexplicably, the housing market bounced back and is now even stronger than it was last year – and last year was already a record-breaking year for our network. In fact, barring one month, our network’s reported sales totals are higher for every month this year when compared against last year’s figures,” he states.
Slow growth for average house prices
Despite the growth in activity, Lightstone Property reported that as at end May 2022, national year-on-year house price inflation was at just 4.46%, having decreased consistently since early 2021.
According to their latest data, the nationwide average price of sectional titles for Q2 2022 is R1,049,437 which, when reviewed against the figures from previous Re/Max National Housing reports, is an increase of just 1% YoY and 3% QoQ.
The nationwide average price of freehold homes is R1,422,901 which, when reviewed against the figures from previous Re/Max reports, is an 8% increase YoY and a 6% increase when compared to last quarter. The average active Re/Max listing price for the second quarter dipped slightly QoQ and YoY and amounted to R3,198,460.30.
Home loan values increase
On the other hand, the average bond amount granted during this period, according to Lightstone Property data, amounted to R1,345,000, which is an increase of 8% YoY according to the Re/Max reports.
Bond originator, BetterBond, reported the following loan totals for repeat buyers in each part of the country:
No great shifts between price brackets
No substantial changes occurred within the sales volumes between the various price segments during the second quarter of 2022. All price segments remained in the same position as last quarter. Sales priced between R800,000 and R1.5m continue to account for the largest portion at 26.1% of all transfers occurring in Q2 2022. Following this, transfers below R400,000 account for 24%; transfers between R400,000-R800,000 follow in third place at 22,6%; sales between R1.5m to R3m account for 19.7%; and those above R3m account for 7.7% of the total transfers this quarter.
Western Cape outperforms all provinces
The Western Cape continues to be a popular destination for semigration, so much so that all the top five searched suburbs on remax.co.za can be found in this region:
– Bloubergstrand, Western Cape – 3159 searches
– Sunningdale, Western Cape – 2410 searches
– Parklands, Western Cape – 2315 searches
– Claremont, Western Cape – 2199 searches
– Parklands North, Western Cape – 2150 searches
The Western Cape also continues to be the most expensive province. According to Private Property, the median asking price per province of active listed stock on Private Property for Q2 2022 were as follows:
“I am encouraged to see that the South African real estate market is as active as it is. My guess as to why we continue to see such high levels of activity is probably owing to the change in lifestyle that the pandemic put into motion. Whether you are now working from home and require an office, have realised the value of living closer to loved ones, needed to downscale owing to financial constraints, or simply discovered that you no longer like your current home, the pandemic provided many with reasons to buy and sell property.
“I remain curious to discover whether the predicted interest rate hikes that lie ahead will have a more noticeable effect on how active the current housing market will be in the following quarter,” Goslett concludes.
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The US housing market is on the cusp of a “deep freeze” as rising mortgage rates and steep home prices conspire to limit buying and selling activity, a prominent economist warned this week.
Mark Zandi, the chief economist of Moody’s Analytics, pointed to a slowdown in demand among prospective home buyers. Sales of previously owned homes slumped by 14.2% in June compared to the same month one year earlier, even as the median sale price jumped to 13.4% to $416,000 over the same period, according to the National Association of Realtors.
“It makes sense, with the higher mortgages conflating with higher house prices, first-time homebuyers just can’t afford to buy in. They’re locked out,” Zandi told CNBC. “And trade-up buyers, they’re kind of locked in because if they sell and buy, they’ve got to get another mortgage at a higher rate and their monthly payments are going to rise.”
Zandi added that real estate investors are “going to the sidelines” until market conditions become more favorable.

“Demand is really weakening very rapidly and you’re right, I think housing is going into a deep freeze,” Zandi said.
All forms of borrowing are becoming more expensive as the Federal Reserve hikes interest rates to combat inflation. The volume of mortgage loan applications recently hit a 22-year low as the higher rates and steep home prices shut real estate shoppers out of the market.
Earlier this week, the National Association of Home Builders/Wells Fargo Housing Market Index showed home builder confidence fell 12 points to 55 in July, hitting its lowest level since May 2020 as builders react to the deteriorating conditions.
Zandi noted his view that “house prices have peaked,” with declines likely to follow later this year or early next year as sellers acknowledge the reality that their asking prices have become unaffordable.


“I’m not arguing we’re going to crash; I’m just arguing there’s a major comeuppance coming in regard to house prices. I think the market is under a lot of stress,” he added.
Earlier this week, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the housing market was on the verge of a “meltdown” due to sagging demand and confidence.
As The Post reported in June, Zandi and other economists warned that a housing correction was inevitable due to rising interest rates – though experts say the slowdown won’t reach the depths that occurred during the subprime mortgage crisis of 2008.