South African estate agents report that houses in some parts of the country are sold immediately or take as much as five months on the market.
Aerial view of Scarborough in the Southern Peninsula. Properties in Scarborough remained on the market for an average of 152 days before selling compared to 315 days in the same period in 2010.
They say it has a lot to do with pricing, an old adage we have heard before, if it’s priced right, no matter what the market is like, it will sell.
In the Southern Peninsula, the number of days properties remained on the market before being sold has declined reflecting a better understanding of market realities by sellers.
According to Francois Venter, Jawitz Properties regional sales manager for the Western Cape, the exception to this trend is Simon’s Town where listing days have increased.
Venter says for the first months of 2011, properties in Scarborough remained on the market for an average of 152 days before selling compared to 315 days in the same period in 2010.
In Kommetijie, it took an average of 103 days to sell a property and 253 days in 2010, Noordhoek, 106 days compared to 172 in 2010, Noordhoek surrounds, it took 89 days compared with 150 in 2010 and Fish Hoek and surrounds, it took the 98 days to sell a property compared to 153 days in 2010.
“In all these areas the difference between the list price and the final selling price has reduced from an average of 11 percent in 2010 to 9.8 percent this year, which shows that sellers are becoming more realistic,” says Venter.
He explains that in Simon’s Town, it took an average of 370 days to sell a property compared to 243 days in 2010. Home values have improved with the 2010 average selling price of R2 028 333 and this year the average selling price is R2 658 158.
Seeff Properties in Johannesburg reckons there is no doubt that in certain suburbs homes can sell almost immediately provided the property is appropriately priced.
Tony Ketcher, managing director of Seeff Properties Randburg says when the home is priced competitively with the other homes on the market and the value relates back well to what is previously sold, then the home will sell within three months.
This property is Robindale is selling for R2.3 million through Seeff Properties Randburg.
He says in his areas of operation, a good 40 percent of property stock sold in August and mid-September was sold within two months.
Asked about some of the trends in selling homes, he says they are experiencing a very good attendance at show houses.
“The single most important criterion which impacts on delays in selling a home is price,” says Ketcher.
As an example, he says suburbs including Linden and Robindale always have buyers looking for homes because of close proximity to good Afrikaans schools. However, the location is great and meets the buyers' expectation but price is not perceived by buyers to be value for money and so they look elsewhere.
“For many reasons, sellers are not prepared to drop the price and there is usually no urgency to sell, so they hang onto the properties in the hope that prices will improve.”
Where there is a need to sell quickly, sellers who want to buy into a retirement village, are relocating or due to family circumstances, are prepared to look more realistically at prices, he says.
Ketcher says he wouldn’t go as far as saying that demand relates as much to price brackets of properties being sold as it does to the nature of the area.
He describes Weltevreden Park as a highly active area with a good R60 million values achieved in property sales annually. This suburb is close to freeways, good quality neighbourhood and this is where many start-up families make their first home purchase.
Again, he says, if the property is not priced properly, it will not sell. Recently, he says they cancelled a mandate with a few sellers because they believed they were not able to achieve the price that those sellers expected.
Homes priced over R1 million are also selling fast. He says they are seeing a growing interest from buyers in Emmarentia and Greenside coming from the Muslim community thanks to the introduction of the mosque. Homes sell for between R1.5 million and R2. 5 million.
In Montgomery Park and Roosevelt Park, estate agent Rowena Ridden mourns the shortage of stock as buyers are actively buying in the price ranges of between R1.2 million and R1.7 million. Ridden attributes this drive to buy to the fact that these two suburbs are located close to Sandton, Rosebank and Johannesburg CBD.
This facebrick in a cul-de-sac home in Weltervreden Park is priced at R1.349 million through Seeff Properties in Randburg.
Ketcher says Ferndale is an area where sales of free standing homes have been slow and pricing is seemingly an issue.
Property prices in Ferndale have probably bottomed, but will remain relatively flat for the next 24 months given the surplus supply over demand.
“It is my view that we will not see a significant uptick in activity in Ferndale over the next year.
He adds that he feels one of the current constraints is the reluctance of banks to lend money. There are buyers in the market and in many cases, the home loan application is seen as marginal for the bank and self-employed would-be buyers struggle to obtain finance.
Pam Golding Properties (PGP) says that on average, it takes around two months to sell a property if priced properly.
“Houses that enter the market at inflated prices take longer to sell and in this regards, they may sit on the market for as long as 12 months before the correct price adjustments are made to meet market trends,” says Carol Reynolds, PGP principal in Durban North and La Lucia.
When asked what makes a house sell quickly, she says in the current market, pricing is critical. She explains that they are currently facing a number of obstacles that need to be looked at when assessing market value.
They include the rising household expenses which impact on the buyer’s affordability, banks’ conservative lending, the value that banks attach to a home and lastly, the property itself - a seller has to ask if these relate and tick yes from the buyers’ perspective.
Reynolds says as an example, some of the questions that may arise include: Does the home has three bedrooms? Is the garden level? What is the condition of the home?
“Buyers are happy to purchase fixer-uppers provided they reside in good neighbourhoods where the risk of over-capitalisation is small.”
The greatest trend is that demand is most buoyant in the medium to low price category, where houses are priced below R2 million.
These homes generally sell within two months whereas more expensive homes take longer to sell because the size of the buyer pool at this higher level is considerably smaller, she says.
Reynolds says banks are still sticky about where they will lend, they assess area risk when valuing properties and certain high-risks areas will not attract any lenders. As a result, she says would-be buyers are not granted bonds in those perceived high-risks areas.
She says locations that are proving popular are close to schools and these include locations such as Durban North, La Lucia and Umhlanga. Berea and Morningside offer good value and will outsell areas like Umbilo.
“The leisure or second homes market remains muted given that owning a holiday home is considered a luxury.” – Denise Mhlanga
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