Where is the power in YOUR market?

Just about everyone knows that the real estate market is cyclical – or that there is sometimes more demand for homes than the supply of properties for sale, and sometimes an oversupply because demand is low.

During the latter part of this cycle you will often hear people say that there is a “buyers’ market” in real estate - because it is obviously easier for buyers to negotiate a favourable deal when there are many homes on the market and only a few people willing or able to buy.

On the other hand, says Berry Everitt, MD of the Chas Everitt International property group, the first phase of the cycle is usually termed a “sellers’ market” – because an excess of demand over supply means the power is in the hands of sellers and makes it easier for them to negotiate higher prices for their properties.  

“And that is where the SA property market as a whole is said to be right now, with a large number of prospective buyers and insufficient supply to meet the demand.

“However, it is extremely important to understand that real estate markets are never homogeneous – and that conditions in local sub-markets or ‘pockets’ can be totally different to those in a neighbouring town or even the next suburb.”

So, he says, while it may be said that homes are on average selling faster and for higher prices than they did a few years ago, that might not be the case in a specific location where there is perhaps still an oversupply of homes resulting from the Great Recession. For example, in some small coastal towns in SA, buyers are still able to negotiate hard for the homes they want and may even find a “bargain”.

“By contrast, there are some high-demand pockets of the market now where it is extremely difficult for buyers to find homes for sale and there is such fierce competition for anything that does come on to the market that sellers often receive several offers and may even end up getting more than their original asking price.”

Writing in the latest issue of the Property Signposts newsletter, Everitt says it must be emphasised, though, that this is not necessarily the norm. “The effects of new developments, interest rates, consumer confidence, rising utility costs and unemployment are different in every area, which means that the balance of real estate power is different in every area – and is constantly shifting.

“For this reason, it is pointless to try to “time” your home sale or purchase in terms of the prevailing view of the market as a whole. You should rather try to establish who currently holds the power in the particular area in which you are interested, so you can make the smartest offer or set the correct asking price for your property – at the time that best suits your personal circumstances.”

And the very best way to do that, he says, is to seek the advice of a properly qualified and experienced estate agent who knows that particular real estate “pocket” in detail and is in touch with what is happening there on a daily basis

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us