Capitalise on over-stocked new homes

Property buyers, buoyed by the more positive mood in the market, are finding that there is something of a stock shortage in some respects, even at this early stage of the recovery cycle.
Gerhard Kotzé, CEO of the ERA South Africa property group, says this is due to large numbers of sellers now withdrawing their properties from the market in anticipation of receiving a higher price “down the road”.
By contrast he says, buyers can find ample stock, wide choice and value in recently completed sectional title and cluster developments.
“While we have what amounts to something of a shortage of pre-owned freehold properties we have precisely the opposite in the case of cluster and sectional title projects where developers with long lead times were hard hit by the recent property market recession.
“Whereas property supply and demand usually works in tandem across all categories, there is now a divergence which works to the advantage of buyers” he adds.
Nor is the situation likely to change in the short term, he believes in that the supply of cluster and sectional title units is likely to remain in surplus for the immediate future, despite a lack of plans passed and new building activity.
“There is therefore a brief window of opportunity for buyers to acquire such properties, probably at good prices, before supply moves into general equilibrium across the board once more. 
“On the other hand as far as freehold properties are concerned, sellers may be over-optimistic about the likelihood of obtaining higher prices later, particularly if they make the mistake of returning to the market in say, six to nine months time, expecting to see a significant increase in the general level of prices.
“The joker in the pack on this scenario is what is likely to happen to the market post-World Cup when the euphoria dies down and the country’s economy has to re-invent itself.
“Then of course there is the ever-present possibility that interest rates may increase again. There are already hints in the media that the current low levels of interest rates may not last much longer as the economy recovers.
“Finally of course there is the old property adage that if you sell at a particular stage of the market cycle, you will also be buying into prevailing market levels and that, all things being equal, there is no particular advantage to be had from delay.”
Issued by ERA South Africa

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 24 Nov 2017
      Demand for secure estate living in Hout Bay has risen sharply in recent years, precipitating a spike in development with estate homes now accounting for 20.24% of the property landscape with the launch of an exclusive new gated development on 26 November adding 20 more units to the existing 1250 estate homes.
    • 24 Nov 2017
      There are some things that money can’t buy – spectacular views from Mouille Point to the V&A Waterfront and a trendy and lively neighbourhood that encapsulates the very best of the Cape Town lifestyle.
    • 24 Nov 2017
      Tshwane’s four-bedroom Mayoral mansion, nestled among ambassadorial residences in the upmarket suburb of Muckleneuk, fetched R5.1 million after spirited bidding at High Street Auctions’ final sale of the year.
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us