select
|

How to spot a property buyers’ or sellers’ market

Just about everyone knows that the property 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 has dropped off.

What they often don’t know, however, is what this means in practical terms to those who are in the market to buy property and those who are trying to sell their homes, says Bill Rawson, chairman of the Rawson Property Group.

“When you hear people talk about a ‘sellers’ market’, for example, what they are really saying is that there are more prospective buyers than properties for sale – so sellers are in a strong position to negotiate higher prices for the homes they are selling.”

During this stage of the property cycle, he says, you often hear about buyers queuing up to buy units in new developments, for example, or home sellers receiving several offers after a single show day as buyers try to outbid each other for the limited amount of available stock. It usually also doesn’t take long for “for sale” boards in the area to become “sold” signs.

“This is also the market phase during which property prices tend to rise fastest – and usually not the best time to be a buyer. First-time buyers, especially, can have a hard time keeping up with rapidly rising prices and the resulting need for bigger home loans and bigger incomes to support those loans.”

Being in a “buyers’ market” means that the situation is reversed and it becomes easier for buyers to negotiate favourable deals because there are more homes for sale than people who are willing and able to buy them.

“This situation can occur for a number of reasons, such as a sudden surge in new developments and increase in the amount of stock for sale, a decline in the economy which discourages prospective buyers, or a rapid rise in interest rates that makes it really hard for prospective buyers to qualify for new home loans.

“But the practical effects are always the same, namely that price growth slows right down, properties tend to spend much longer on the market before they are sold, and that there are much bigger differences between listing and selling prices.”

For obvious reasons, he says, this is generally an anxious time to be a seller – although it is important to note that being in this phase of the market does not mean that your property won’t sell at all.

“What is more, once it is sold and you have the proceeds in hand, you are going to be in a very strong position when it comes to negotiating the price of your next home, so it is worth doing whatever it takes to achieve your sale in the shortest possible timeframe.”

The key is to price your home correctly from the outset, says Rawson, with the help of a properly qualified and experienced estate agent who knows the market in your area in detail and is in touch with what buyers are actually paying for homes like yours right now.

“An agent like that will give you the best advice about how your home compares to others on the market, about the level of buyer demand in your neighbourhood, and about what your asking price should be to attract the most prospective buyers as soon as the property is listed for sale.”

It also helps, he says, to ensure that your home is in the best possible condition and “show ready”, bearing in mind that buyers who have many properties to choose from and not much competition from other buyers are likely to dismiss any property that looks as if it needs a lot of work and just move on to the next viewing.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK