The average time a home remained on the market before it was sold increased further by two days to 15 weeks and six days in the third quarter, indicating the market appeared to be gradually drifting away from equilibrium and price realism, according to FNB.
John Loos, a household and property sector strategist at FNB, said the bank took a subjective view that the market on a national average basis was in equilibrium when a home remained on the market for about 12 weeks or three months before being sold.
Loos said 93 percent of all properties were sold for less than the asking price in the third quarter compared to 92 percent in the previous quarter and the multi-year low of 78 percent in the second quarter of 2014.
"While the majority of sellers normally tend to start high and allow themselves to be bargained down as a strategy, there is nevertheless a cyclical element to this behaviour, and we have seen this estimated percentage of sellers having to drop their asking price creeping higher of late," he said.
Loos said the shift away from market equilibrium towards less realistic pricing had taken place more in certain of the country's coastal metros, where the average time a home remained on the market before being sold was at 20 weeks and two days in the third quarter and virtually unchanged from the previous quarter.
However, Gauteng had been a "solid" region with the average time a home was on the market before being sold remaining very near to 12 weeks, he said.
Loos said Cape Town, Ethekwini and Nelson Mandela Bay had been noticeably weaker than the major Gauteng regions in terms of the two quarter moving average in the two winter quarters this year.
He said Cape Town, the best of the coastal metro regions, averaged 16 weeks on the market for these two quarters, Nelson Mandela Bay 17.57 weeks and the manufacturing dependent Ethekwini a very weak 27.43 weeks.
By comparison, the average in greater Johannesburg, comprising the City of Johannesburg and Ekurhuleni metros, was a healthier 12.43 weeks, while the Tshwane Metro was even more impressive at 11.79 weeks, he said.
Loos said Namibia appeared to be significantly further away from market equilibrium than South Africa and the average time a home remained on the market before being sold was 24 weeks and two days compared to 15 weeks and six days in South Africa.
He added that the City of Cape Town market, which was renowned for its strength in recent years, appeared to be headed towards a longer average time on the market in the second quarter of this year, but made something of a comeback in the third quarter.
This suggested Cape Town's recent period of market strength may not be over yet, he said.
Loos said nationally relatively few agents cited stock shortages as an issue these days and there also did not appear to be a massive glut of properties on the market yet either, with only 6 percent of agents citing that there was "ample stock".
He said that given the current economic environment, it was likely that the average time a home remained on the market before being sold would continuing rising.
"This should translate into further real house price decline in the near term," he said.