The more, the merrier

While the existing market conditions still largely favour buyers, as the supply of property inventory decreases, we could soon see a trend of multiple offers on well-priced homes that are in good condition, says Adrian Goslett, CEO of RE/MAX of Southern Africa.

“We all remember the property boom period where multiple offers were a common occurrence. More than one buyer wanting a property was the norm and sellers often had a generous selection of offers from which to choose,” says Goslett. “Although trading conditions have been more difficult over the past few years and the market has not experienced any multiple offers, increased volumes of buyers and property transactions have meant that the demand for property could soon outweigh the stock that is available. Housing inventories continue to drop and in some parts of the country we have already seen reports of a lack of stock in the market to meet the growing demand,” he says.

While a multiple-offer situation is normally associated with a seller’s market, it is possible that the situation may arise based on the existing property circumstances.. Goslett says that if there is a home that is priced correctly and is well maintained, it is likely to attract a few potential buyers. “In fact,” says Goslett, “given the property price reduction since the boom period, property that was once out of reach is now within an affordable range for far more buyers.  Every buyer who had seen a property and liked it but could not afford it may now potentially be able make an offer.”

Goslett notes that due to the correct pricing of property, along with the remarkably low interest rates, as well as financial institutions having a greater credit appetite; there has been an increased number of buyers entering the market that were previous unable to do so. “This year property sales are up by between 9% and 10% from the same period in 2011, which was up from the year prior to that. Buyers are back and while affordability remains key; those who have access to available finance are making use of it and taking advantage of the conditions in the current market before it changes,” says Goslett.

Reports from America suggest that certain sectors of the US property market are already experiencing a multiple-offer environment where buyers are fighting over properties, due to the fact that far less is available than in previous months. The National Association of Realtors Survey in the US reported that buyer demand has outgrown supply and multiple offers are once again making an appearance in the market. It revealed that while buyer traffic was still well above the moderate level, seller traffic was relatively flat.

“Even though it is not likely that we will see a multiple-offer trend to the extent we did in the boom years, there is evidence that we could follow the US market here in South Africa as more buyers compete in a market with fewer options.” says Goslett. “Multiple offers on homes and increased competition among buyers could change the market playing fields and put the power back into the seller’s hands. Buyers who are waiting to invest shouldn’t hold out too long, or they could find themselves missing out,” Goslett concludes.

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