The bridging gap of property prices

The selling prices of properties within Cape Town’s City Bowl and the Atlantic Seaboard are edging ever closer to the full asking prices as demand for property in the city increases. 

This is according to Susan Watts, Broker/Owner of RE/MAX Living, whose office services Camps Bay and the surrounding suburbs. She notes that while there was once a large divide between what sellers were asking for their homes and what buyers were willing to pay, over the last 18 months the gap has been closing.

3 Bedroom Apartment for sale in City Bowl, Cape Town

RE/MAX Living sales associate and area specialist, Vangelis Doucas says that the market is currently experiencing a shift in dynamics with sellers adjusting their prices to be more in line with the market. Buyers are also now prepared to offer more due to the short supply of properties available. “Supply and demand is intricately linked and currently the supply of properties on the market has dwindled, pushing demand up substantially. Currently the difference between asking and selling prices is around 5% on average, which is a lot closer than what was seen previously,” says Doucas.

He notes that demand within the City Bowl has always been strong with many buyers desperately wanting to enter the market in one of the city’s most prized real estate locations. However, demand has been further heightened by the change in the market and buyers realising that there is no better time than now to invest and get into the property market.

“Just as we have seen demand increase and many new buyers coming into the market, by the same token, many existing homeowners have also been looking to purchase additional properties or merely upgrade into larger spaces for their newly-established families or downgrade as their families depart and go about their own way. We have a strong movement towards Cape Town with more and more buyers coming to live here because of the lifestyle and safety this city offers,” says Doucas.

According to Doucas, homes that are considered to be correctly priced for the market are selling within days in the City Bowl. “Market related properties only stay on the market for a few days as opposed to homes that are considered to be overpriced. When the asking price of a property is perceived to be above its market value, homes can remain on the market for months on end, which emphasises the importance of pricing a property at the right value,” he says.

Adrian Goslett, CEO of RE/MAX of Southern Africa, says that sales trends show concrete evidence that while sellers may think they are giving themselves room for negotiation by elevating their asking price, they are actually just putting off potential buyers and decreasing their chances of selling their property.

“Sellers who are serious about getting the best possible price for their property will need to consider a few things when deciding on an asking price to ensure it is market related,” says Doucas. “It is important for the seller to look at the average prices achieved for similar properties in the vicinity, supply and demand and market conditions in general. The condition of the home should be seriously looked at when assessing a suitable market-related price. Presentation and general condition of the home are imperative factors to be taken into account. Sellers could consider an upgrade and neatening of the garden, main entrance areas, bathroom and kitchen fittings and general appearance of the home,” he advises.

Doucas concludes by saying that above all it is vital for sellers to be ready to sell and take advantage of the strong market conditions in their favour at the moment. “Sellers should select a reputable real estate agent who can represent them in the property market and work closely with them to achieve the desired result.”

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