The extent to which the conditions in the South African residential sector are now in favour of buyers has not as yet been fully appreciated by many people trying to sell homes, says Tony Clarke, MD of Rawson Properties.
'Twelve months ago,' said Clarke, 'in the Rawson Group we were finding that the difference between the asking and the achieved prices was on average 15%, i.e. 15% down on the asking price. An analysis of the latest figures shows that the difference is now 22%. This really is a buyers market '“ we have not seen so large a differential for 30 years'
Properties, said Clarke, are now on average taking four to five months to sell. A year ago the time lag between their coming on the market and being sold was six to eight weeks.
Attempts to hold prices at, or close to, their previous levels, said Clarke, are doomed to failure because not only is ample low priced stock available but todays prequalified bondholders are astute and are hunting for bargains.
The market, he said, had been 'skewed' by the large number of repossessed and distressed properties now for sale.
'As many homeowners of repossessed units were on 90% to 108% bonds and as the banks are often willing to settle for 10% below the bond value (not the house value), the actual decrease on the home value can be 30% or even more.
'For example, on a R1,1 million home bonded for R1 million, the bank might easily accept a price of R750 000 to R850 000.
'If you are selling of your own free will, e.g. to be closer to your work or a school, you may well have to accept a similar drop in prices.
'The uncomfortable truth is that the market is dictated by what buyers are willing to pay '“ and buyers are now aware that they can get very significant bargains'
Obviously, in the current situation, said Clarke, people will hold onto their homes longer.
However, if this is not possible, the seller can take comfort from the knowledge that he, too, will be buying in a very competitive market.
'What you lose on the swings you will, with luck, gain on the roundabouts. Do not delay in anticipation of an upswing'
