Some positive indicators in local housing market

“Overall, there remains an undercurrent of overpricing which is impacting upon turnaround time, activity levels and the offer rejection rate, however, with increased market awareness, price adjustments are taking place with the result that we are seeing more movement in most sectors of the market. Average turnaround times to sell are from two to three months, and even less in some instances,” she says.

“At grassroots level, we have seen an increase of 15 percent in showday foot traffic in the second quarter of this year (2011) when compared with the first quarter. We have also seen growth in enquiries via the internet, highlighting the fact that websites are fast becoming a key research tool for buyers, enabling them to hone their options and choices before making personal contact with an estate agent."

Reynolds says from an actual sales perspective, and in the areas of Durban North and La Lucia, activity levels have grown in quarter two of this year. “While activity in these areas was down almost 30 percent for quarter one compared with the same period the previous year (2010) - based on figures from Lightstone - we are now seeing activity levels catch up to those recorded last year, and are hoping that this trend will continue for the remainder of the year.”

She says the offer rejection rate is unfortunately still relatively high, with sellers losing out because they are underestimating the value of a written offer in a market which remains constrained by subdued conditions. “The quality of the purchaser as well as the nature of the terms of the agreement are as important as the price, and where sellers are clinging to price before quality, sales are crashing because the banks are not finding value.”

Reynolds reports that in Durban North the price bracket below R2 million is the most active, with more offers being converted to sale. In La Lucia, the sectional title market is currently more buoyant than the freestanding homes market because units selling for under R3 million are presently in higher demand than larger homes in higher price categories.

“What we are seeing in the marketplace in general is that the price differential between offers made and prices at which homes are marketed can sometimes be as much as 20 percent. This is due to the fact that in such instances marketing prices are not necessarily a true reflection of actual value. We are finding that sellers are receiving valuations that are inflated, and then experiencing the frustration of not selling their properties because their marketing prices are out of sync with actual market conditions. It is a fact that by its very nature the selling of a home is a very personal matter, and understandably many people attach considerable sentimental value to their homes. As a result, some agents find it difficult to give their sellers frank advice about realistic pricing, because they don’t want to disappoint their sellers. However, correct pricing is in the seller’s best interests to avoid a property which may even end up becoming stale or sitting on the market for a lengthy period – or even not selling at all - due to being over-priced, or significantly discounted.”

Reynolds says affordability remains the key driver of bond acceptance, and it is imperative to factor household running costs into the equation when looking at buyer affordability. “On the whole, purchasers who have the means to put down a sizeable deposit will be better positioned to negotiate with the banks. Generally one aims for a 15-20 percent deposit, however the banks are once again beginning to look more favourably on 10 percent deposits again, so anywhere between 10 and 20 percent is a good starting point.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 20 Apr 2018
      Whenever changes in the political ecosystem of a traditional property market create uncertainty, smart investors begin to look elsewhere for new opportunities. Property experts at IP Global have analysed the trends and crunched the numbers to find new markets to explore in Europe and the United States.
    • 20 Apr 2018
      Energy and water self-sufficiency are increasingly important factors in home buyers’ choice of property – especially in Cape Town where the extreme drought of the past few years has made municipal supply costly as well as uncertain.
    • 19 Apr 2018
      During the last decade, rampant development has progressively transformed Cape Town’s property landscape with densification being the order of the day, but there are still one or two hidden gems like Scarborough which have retained their original character, offering an inimitable lifestyle and an attractive investment opportunity.
    • 19 Apr 2018
      The rental market is a cut-throat sector of the real estate market that waits for nobody. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, first-time renters need to be fully prepared before they even start the process of looking for a place to rent in order to avoid the disappointment of losing out on their ideal property.
    • 19 Apr 2018
      Choosing to buy your first home instead of continuing to rent is a big decision that will usually take some time to put into action, but the sooner you can save up a sizeable deposit, the closer you will be to reaching your goal.
    • 18 Apr 2018
      Selling your home is no small task and as you will quickly find out, there are a lot of misconceptions about the process. Gerhard van der Linde, Seeff's MD in Pretoria East lists the top 5 misconceptions when you are selling your home.
    • 18 Apr 2018
      The Cape Town municipality is now installing water-management devices at properties that have been non-compliant with the new level 5 water restrictions and there are talks of fines between R5,000 and R10,000 for households that use too much water.
    • 17 Apr 2018
      The recent interest rate cut has stoked the coals in the first-time buyer’s market. At least for the next two months until the next interest rate announcement, homeowners are guaranteed lower monthly instalments than in the previous quarter. But, is it wise to take out a 100% bond just to enter the property market while interest rates are low?
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us