ERA – Sellers still ignoring property professional's advice
Surprisingly, given current tough conditions in the KZN property market, sellers still persist in ignoring the advice of property professionals and insist on over-pricing their homes.
Russell Hayes of ERA Unique Westville says while this “maybe it will sell” mentality may not preclude a sale, it typically delays the process until the price is adjusted to more realistic levels and almost inevitably results in a lower price than the estate agent recommended at the outset.
Hayes makes the comments against the background of recent market analysis by the agency in Westville and Cowies Hill over an eight-month period.
Some of the key take-outs from the research are that:
* Unrealistically priced properties are achieving between 2%and 5% less than ERA’s valuation;
* Properties are on the market for an average of 71 days; and,
* The motivation for selling includes a high quota of potential emigrants (40%) and distressed disposals.
Also, sales volumes are down 35% to 40% and prices achieved are down between 15% to 20%, the figures all being year-on-year.
“Conditions therefore remain difficult and this is probably a microcosm of many of the country’s property markets, although obviously on the ground this will vary from region-to-region” says Hayes.
“However based on our own backyard, I would anticipate an upturn in late 2009 going into 2010 as the final preparations for the World Cup are put into place.
“That scenario could of course change depending on how far the Reserve Bank is prepared to go in cutting interest rates and the impact of world economic conditions on the South African economy.
“A reduction of 2% to 3% would be required to kick start the market and given Reserve Bank governor Tito Mboweni’s previous history, we can expect only small, incremental decreases in rates so it will take time before the benefits filter through to the property market, suggesting no sudden, overnight improvement, but rather a steady recovery.”