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Real Estate – Current market overview

(By Kathy East)
 
“There is indeed a shortage of properties in primary residential areas, and sometimes homes which were listed previously, are being withdrawn from the market by the seller based on the belief that if they wait for another few months or a year, they will get a better price. 

Such an expectation is perhaps opportunistic as the market is not improving that significantly to warrant a seller waiting for a period in order to realise a bigger profit” says Craig Hutchison, CEO of Engel & Völkers Southern Africa. “When our property sales advisors present sellers with our E&V comparative market analysis to determine the suggested selling price, they base this information on Deeds Office data and if the seller accepts such a valuation, these home should sell quicker as their price is then market-related” Craig continued.
 
Although all the major banks have been more willing to grant mortgages to home buyers in general over the past 12 months, there has been an increase of almost 9% in the number of own-client applications that has been rejected, says Shaun Rademeyer, CEO of BetterBond Home Loans.  It is thus much better for homebuyers to apply through an originator and have the option of immediately submitting to other institutions if their own banks decline their application.
 
Shaun added “Meanwhile, we would like to dispel a few lingering misconceptions about what mortgage originators do and how they operate. First of all, there is no charge at all to consumers for our service – and nor does the homebuyer who obtains a loan through us get charged a higher rate of interest”.
 
“In fact, our knowledge of bank requirements and processes is so extensive that most of our clients end up paying a lower rate of interest than if they had gone to a bank directly, and are able to make significant savings on the long-term cost of their homes as a result” he concluded.
 
Sandy Reddy, Head of EV Financial Services, echoes Shaun's sentiments that you have a much better chance of being approved for a home loan if you apply through a mortgage originator than if you try to submit your application to a bank privately. Sandy is always available to provide applicants with confidential advice and professional assistance when you need to apply for a home loan, at info@evfinance.co.za or 011 929 3096.
 
Housing trends

Excellent security is a factor which always plays a decisive role in a buyer's list of requirements, and therefore security villages/complexes or boomed off areas are very sought-after in the current market. Properties situated in security villages will receive more enquiries when a buyer needs to make a final choice.  Obviously, if the property offers its own excellent internal security measures such as electrified fencing, beams, burglar bars, etc it will also appeal to a buyer who needs to buy in a specific area close to schools, office parks or for whatever other personal reason.
 
Youngsters now entering the market tend to choose to buy in areas where they feel part of a community and these buyers prefer to have all their favourite convenience stores and activities very close to home.  These buyers also prefer newer homes where living areas are large and open-plan with a study as many of these buyers are either self-employed or work from a home or 'virtual' office.  It appears that these buyers are not discouraged by the interest rate hike, and have probably saved up for a deposit.  They will also have done their homework and know the true value of properties. 
 
Market trends

It is rather interesting to read that 22% of Gauteng owners sell their homes in order to upgrade to a better property. This is according to John Loos, Household and Property Sector Strategist at FNB Home Loans. 
 
There was a lively revival during the first quarter of 2014 in the residential property market, with many more buyers visiting our show houses which lead to more successful sales, compared to the last five years, stated Craig. Our sales are at a record high and this is definitely due to both the top quality real estate sales advisors we have qualified through our recognised international Training Academy, as well as the fact that the banks have become more lenient on the mortgage lending requirements.
 
Craig proudly yet humbly noted that the value of the Engel & Völkers South African group's total registered sales for the period January to April was the highest turnover that has been recorded, showing a 51% growth compared to the same period last year. This is the highest growth rate since his appointment in the position as CEO of E&V Southern African in January 2009.  This remarkable increase in turnover is indeed a very positive sign, considering the recent repo rate hike by the Reserve Bank and it clearly enforces the confidence that South Africans have in our economy and the real estate market, he enthused.


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