For almost two years now, says Bill Rawson, Chairman of Rawson Properties, property trend commentators and the spokespeople for the major estate agencies have been warning house sellers that, if they genuinely want to sell and are not just out to test the market, they have got to be realistic about prices '“ but his group (and others) still regularly run into sellers who think either that this advice is inaccurate or that, if they can just hold out another six to twelve months, they will once again be able to achieve the sort of boom prices seen in 2007 '“ plus escalation.
'In 40 years property marketing,' said Rawson, 'I have only once or twice before seen sellers being so illogical. We have all to adjust to the new realities '“ which are that significant price rises are still some way off'
The situation, said Rawson, is far more serious and 'skewed' at the top end of the market and in the upper middle brackets. In other price categories not only is there far more sales action but there is a great deal more realism '“ 'encouraged, perhaps, by the fact that the drops here have not been so drastic'.
In former times, said Rawson, sellers of bigger homes would factor into their price the 'bonuses' '“ that they had not been paying rent, that they had enjoyed many years of living in the home, and that it had enhanced their lifestyle and kept the family together. Taking these points into account, he said, they might then be prepared to accept the market value of the home.
Today, however, no matter what the market dictates, a certain type of buyer will still feel that he is 'entitled' to a price that reflects a steady annual appreciation in good and bad times '“ and covers outlays made on the property.
Those being 'caught' by the current conditions, said Rawson, are people who bought in 2007/2008 and who now, for one reason or another, are forced to sell.
'We have,' he said, 'recently seen an owner who bought at R12 million having to sell at R9 million. Another who bought at R3,6 million had to accept R2,4 million.
'It can be painful for an agent to have to explain to a seller that he bought at a market peak and that the only 'true' value of a home is what todays market will pay '“ but that is an exercise all top end agents have to go through regularly'
Asked to predict a date when 'good' conditions will be seen again, Rawson said that he had begun to forecast a late 2011/early 2012 upswing '“ but the Japanese and Arab world crises, coming on top of the global problems, could easily delay it by another year.
'I know there are commentators saying that the global economy is now sufficiently recovered to shrug off these additional negatives but, as I see it, they are bound to have an impact'
Repeating what he and his MD Tony Clarke have said on several occasions, Rawson said that property was and always will be a sound investment for the man taking a long term view and able to sit out the first five or more years.
'In the decade up to 2009,' he said, 'residential property appreciated at an average of 15% per annum. Since then we have seen a slowdown but it will, I predict, continue to outperform the inflation rate and its fluctuations will never be as drastic as other assets'
For further information contact Bill Rawson on 021 658 7100 or email bill@rawsonproperties.com.
