Thinking of selling? Now might be the right time

With optimism in the property market steadily rising and more and more buyers eager to own a home, it may just be the opportune time for sellers to place their home on the market, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
He notes that as more consumers have realised that now is a good time to get into the property market, it also makes it a good time for sellers to take advantage of current conditions. According to Goslett, there are a few reasons that make this an excellent time for sellers to consider listing their property:
Positive price growth

“Bond approval rates have increased and more buyers are showing the levels of affordability required to purchase property. However, inventory of available property is currently depleted, which is driving demand for property higher and higher. As a result, house prices have seen positive growth over the last few years. In 2012 the average house price grew by around 7.1%, increasing again by approximately 6.8% last year. This is good news for those who want to sell their property, especially if they have had their property for some time. Sellers with enough equity can benefit greatly from current housing price increases,” says Goslett.

He notes that while house prices are expected to see even higher levels of growth during 2014, which may encourage homeowners to hold off on selling their property, waiting doesn’t come without its risks. “Various elements could have an impact on the market’s recovery, such as further interest rate hikes or the upcoming elections. These influences could affect demand, which in turn could dampen price growth,” Goslett explains.

A rise in demand

According to the FNB Property Barometer, the demand-supply balance showed an increase during last year, rising by 3% on the average market strength from the previous year.  “Demand is expected to continue rising as the stock of property on the market decreases. The result of fewer properties and more buyers is a much more competitive market environment.  Sellers will be at an advantage in a market where buyers are forced to compete for available properties. This will place the seller in a far better negotiating position, allowing them to be picky about whom they sell to. Selling while demand is high and inventory is low may also garner the best price,” says Goslett.
Interest rates going up

While the interest rate is still at remarkably low levels, the recent rate hike could have an impact on the property market in the future, especially if the rate continues to go up. Goslett says that the initial effect of an interest rate hike on the market is normally quite positive, as it forces buyers off the fence. Buyers who have been looking at purchasing property will likely pick up the pace of their home search so that they can fix their rates before it climbs too high. “However,” says Goslett, “a rate increase also has an impact on buyer’s affordability levels and their purchasing power. If the interest rate begins to increase over the next year, buyers will qualify for lower bond amounts, which could eventually impact on home prices once again.”
With an increased number of potential buyers and lower levels of property available in the market, sellers will be able to make the most of the current circumstances provided they have the required equity. “Although the conditions surrounding the market are currently looking up for sellers, it is always important to view property as a long term investment and ensure that you sell when it is the right time for you,” Goslett concludes.

Find the right real estate agent to help you sell your property here 

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