Another high profile figure in the real estate agency world, Bill Rawson, Chairman of the Rawson Property Group, has warned that the new optimism evident in certain sections of the residential property marketing sector should not lead sellers to try and insist on the high prices achieved in the 2007 boom.
Reputable analysts like FNB and OOBA are telling us that year-on-year price increases are now nearing 9%.
“It should, be realised firstly that global economic problems coupled to problems in South Africa could result in these price rises becoming unsustainable and secondly it should be accepted that buyers, who today tend to be far less impulsive and more shrewd in their choices, can still find many properties for sale which are 15 to 20% lower than their previous prices levels. Anyone who sticks to a high price against the advice of a reputable agent is likely to find his property sticks on the market, acquires a negative image and eventually sells for less than its true current value.”
The question he is most frequently asked, said Rawson, is, “How active is the market right now?” and the answer, he says, is - surprisingly active. Certain groups, including his own, he said, have recently been reporting record turnovers in May and June. But this does not indicate that the market is flourishing overall, because other groups, especially those dealing in high-priced properties, cannot as yet report significant improvements.
“The number one reason for confidence is that demand remains very strong, especially at the lower end of the economic scale. However, the number of sales is severely limited by the banks’ inability to grant bonds. The good news is that OOBA recently reported that 41% of bond applicants are first-time home buyers and that 36% of bonds are granted to the same group. We are now, for the first time, witnessing a big increase in such buyers being given 100% bonds - and this is encouraging. As the banks gradually ease up on their lending criteria, once again really competing for bond finance contracts, sales will rise and due to stock shortages, prices will move up too. This is, therefore, a good time to buy but the scene is definitely not yet ripe for trying to raise sale prices to previous boom levels.”
