select
|

Buyer’s vs Sellers Market: What you need to know

As with the economy, the state of the property market is driven by supply and demand which in turn is influenced by a range factors such as the state of the economy, interest rates, availability of credit, political and economic stability and so on.

The property market therefore comprises of a number of cycles and it moves through cycles periodically as it is influenced by the various macro and micro economic forces and factors. You can think of the market as a scale with buyers on the one side and sellers on the other side and so as the numbers alter – more buyers, less sellers or the reverse – the scale tips.

Equilibrium/Balanced Market

When the scale is in perfect balance, we talk of equilibrium or a balanced market – this is when there is good balance between the supply of properties (properties on the market) and the demand for properties, thus enough buyers to match the properties for sale.

In this type of market, there is usually strong activity with plenty of buyers still on the hunt for the right property, but the market is also hinged and can tilt depending on which way the economic pendulum swings. If it suddenly swings with more buyers and fewer properties, then you start heading into a seller’s market.

Seller’s Market


We talk about a seller’s market when the demand for property rises faster than new properties are listed for sale. In this type of market, there is not enough properties to meet the demand from buyers and buyers start competing for a limited pool of properties. The buyer with the best offer - generally the highest price and fewest conditions – then tends to win out the day.

Competing offers then push prices upwards and prices start rising. Sellers can then become more ambitious with their asking prices. Properties also tend to sell quite fast. Offers and prices come in at close to or full asking price and sometimes above the asking price.

When economic and other market forces start bearing down on buyers, demand for property will start subsiding and the market tends to first move back to equilibrium and then to the other end of the scale, to a buyer’s market.

Buyer’s Market

This is the flipside of a seller’s market and it means that the supply of properties for sale now exceed the demand. In this case, buyers can literally pick and choose from a range of similar properties and they can drive down prices. Properties will now also take longer to sell and offers tend to come in at below the asking prices.

In a buyer’s market, the focus tends to shift to market related pricing and if you are serious about selling, then you would need to set your asking price at the right level to attract buyer interest and offers.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
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.
        
    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