The more realistic attitude that real estate agents have for some time now
been pleading for with both sellers and buyers is at last becoming evident,
says Tony Clarke, MD of Rawson Properties.
Among buyers in particular, he said, despite “disheartening stories we read
from time-to-time in the property and financial press”, it is now clear that
the majority still end up being homeowners, in the process accepting that
they can no longer afford what they had originally had in mind.
“It sometimes takes a little time for buyers to adjust to the economic
realities - we saw a period in which they simply froze into a non-decision
making paralysis - but they have started to come round, often agreeing to
smaller or less modern homes or settling in a less expensive suburb.”
A fair number of buyers, added Clarke, are still waiting in the wings for
prices to drop - but they could well be disappointed if they do not make a
decision within the next few months.
“I think we are now approaching a stage in which the much publicised
stabilisation of prices will soon be complete,” he said. “In many suburbs,
for example, we are still seeing price rises of 8% to 12% per annum.”
Clarke said that many banks had shown a huge sense of social responsibility
by agreeing to 100% bonds “as a matter of policy” in the R500,000 to
R800,000 category - even though the risk at these levels is known to be
greater than that at higher levels.
“It is, however, noteworthy that despite this buying in the lowest prices
ranges has slowed down by some 30% or more,” he said, “but on the other
hand, it is good to learn from ABSA that although the number of properties
under some sort of guardianship or surveillance as a result of defaulting
bond payments has increased, the number of repossessions has, in fact, not
risen as yet. This indicates a growing sophistication in handling the lower
income would-be homeowner and a willingness to adopt remedial measures, such
as extending the bond period or allowing an interest only repayment period
for a stipulated time. It also shows that the stricter credit checks
following the introduction of the National Credit Act are proving
For further information contact Tony Clarke on 021 658 7100 or firstname.lastname@example.org