In the past few weeks I have been getting the same question from our readers. "What is the property market like right now?". Well no matter what any agent tells you - the market in Randburg has been pretty much flat-lining for the past seven years. Prices have barely kept up with true inflation. Recently the difference between initial asking price and final selling price has been running at an average of 30%.
How did we end up in this situation? Many agents would blame it on the banks. Yes the banks have taken a pretty hard line with borrowers since the National Credit Act came in. But at the same time they have had little choice with so many people having impaired credit. It doesn't help that a ninety percent "loan-to-value" is now the norm. On a purchase of one million that means the buyer has to cough up one hundred thousand rand as a deposit. Now don't get me wrong, one hundred percent bonds are still available, but to get one you have to have a near-perfect credit history. Another major contributing factor is the general political climate. If people don't have faith in the future they are not going to make large purchases involving long-term commitments.
This market is called a "buyer's market". Meaning that there are far more sellers than "qualified" buyers. Obviously in this environment the buyer often calls the shots. From the above you might say it is not such a great time to sell, but it is a great time to buy. Well sort of. It is true that many people are "buying up" at the moment. What you lose on one end you gain on the other. Investors are also out in droves hunting for opportunities.
However in this market you can succeed in moving your property. First and foremost you must get the pricing spot-on up front. For example, you do not test what the market will bear by heavily loading the advertised price. That is a formula for disaster. First talk to your "area specialist", that is someone who has been successfully selling in your area for a number of years. Ask them what your property will realistically fetch if sold in the next 90 days. A true market-related price will mean that your property will sell much faster - and that is the key to success. The longer your property remains on the market, the more chance there is of additional competing properties joining it. Soon your home will be standing shoulder to shoulder with others that may offer better value. To sell in a buyer's market you have to make sure your property goes to the front of the line - and fast. You can sell in this market, but your expectations must be realistic.
So the next time an agent tells you the market is great they had better be driving a brand new Rolls Royce - otherwise they are simply telling you what you want to hear.