Overpricing still holding back sales

Higher priced properties are still taking longer to sell - and showing bigger differentials between asking and selling prices.
Denis Quayle, owner of the four Harcourts Maynard Burgoyne real estate offices in Cape Town, says many sellers at the upper end of the property market are still clinging to price expectations that are out of step with market realities.
"Consumers are hard-pressed from all sides due to rising living costs - and even the higher income groups are very value conscious at the moment. On the other hand, some sellers have a skewed idea of what their properties are worth in the current market and are slow to take advice from experienced estate agents on market-related asking prices," he says.
"Unfortunately, their determination to achieve certain asking prices often comes at a high cost, in terms of the length of time it takes to sell a property and the holding costs that sellers have to carry during this period.”
For example, the Institute of Estate Agents property statistics for the year to end- August show that properties in the Cape Town suburbs of Bergvliet, Constantia, Diep River, Kirstenhof, Meadowridge, Plumstead and Tokai took an average of 92 days to sell, and that on average, selling prices were 12% lower than the original asking prices.
"However, the stats also show that upmarket Constantia recorded the biggest average difference between asking prices and selling prices (14,49%) and that homes here too almost double the average time to sell (166 days),” Quayle notes.
“And further analysis shows that Constantia properties listed at prices below R3m stayed on the market for an average of 126 days and sold for an average of 10,23% less than asking price. Those listed at between R3m and R5m took an average of 127 days to sell – for 13,14% less, on average, than the asking price.”
In the R5m to R10m bracket, the average number of days on market increased to 214 and sale prices were 11,82% lower, on average, than asking prices. For properties above the R10m mark, however, the average price differential jumped to nearly 20% and the average listing time was 276 days.
However, Quayle adds, of the seven suburbs analysed, Constantia did show the highest number of sales for the 12-month period at 188 units. "This would indicate that Constantia remains a highly sought-after suburb, but that buyers are very well versed on market value and are prepared to negotiate hard – or keep looking - in order to pay only what they regard as a fair price. Sellers who want to sell quickly should take note."

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