Durban’s affordable homes selling like hot cakes

Dirk van Zuilekom says pricing is paramount
Properties priced to sell in Durban’s affordable markets are trading like ‘hot cakes, but those bar coded around wishful thinking rather than market reality will either sit until the marketplace embraces their ambitious asking value or the price is adjusted, according to an article in the April 2 edition of the Sunday Tribune Property Guide.

Dirk van Zuilekom, chairman of Durban’s largest co-operative marketing group, Network Listings, moved quickly this week to assure sellers that while the market has peaked its activity below the R1 million was still lively. Movement above six figures, and this is dependent on suburb, was being largely determined by the comparative values of other properties for sale. This meant it was important for eager sellers to pitch their homes at market value.
Pricing, more than any other single factor had become critical in bridging the mindset of sellers still lingering in the mist of boom conditions and that of buyer’s current obsession with value for money.

Evidence if this prevailing state of mind was apparent in the surge in numbers of properties listed on Network Listings’ system during December and January after continuous low levels of the previous two years.

Homes for sale are listed with Network Listings more than 100 member offices if not sold within a certain period. The run on properties had greatly reduced the need for co-operative marketing or the pooling of properties over the past three years, but this was now back in fashion with by far the bulk of listings being high priced homes.

Van Zuilekom dismissed all blame apportioned to agents for the wave of overpricing; pointing out that the anomaly ran counter to business interests. However, he did acknowledge that some mischievous agents were deliberately overpricing to curry favour to be awarded selling mandates.

An area of growing concern is the trend of commission cutting, inspired mainly by intensive over trading throughout the industry. While agents’ commissions are strictly negotiable they had to be sustainable in terms of meeting service levels particularly in marketing and advertising.

Media exposure of property, which was any agency’s largest expense, was vital if it was to expose its clients’ properties to the largest possible net of buyers. But this, according to van Zuilekom, was the first cost being progressively slashed by agents offering lower commission rates.

Two key elements in today’s market that sellers should insist upon, especially in the higher priced markets, were written justification of the value of their property and a written marketing programme. Both commitments, van Zuilekom says because of the high turnover in staff, which he expects to continue, should also be evaluated and not taken for granted.
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