SA property market settles, survey finds
The difference in asking and selling prices in the property market is back to normal levels, said the MD of Homenet, David Rogers, on Tuesday.
“Clear evidence that the property market has settled and is set for an upturn is the fact that the difference between asking and selling prices has dropped back to normal levels of between 5% and 10% in most areas,” Rogers said.
The difference between the asking and selling prices were as much as 25% to 30% in the middle of last year.
Rogers said the latest trend emerged from a recent national survey conducted by the Homenet group through its network of more than 160 branches countrywide.
“This [latest difference] is obviously good news for home buyers.”
However, the lowering of the asking-selling price differential is also positive news for home sellers. According to Rogers, it suggests an upturn in buyer interest and thus in sales activity.
The Homenet poll was conducted in response to a statement in a recent First National Bank Property Barometer that more than 80% of sales taking place were for less than the asking price. Other media reports also suggested that asking prices frequently had to be discounted by as much as 50% in order to achieve a sale.
Rogers said the survey was to establish “more accurately” the current extent of the asking-selling price difference and to see whether it had changed since interest rates began to rise in July last year.
“And our research revealed, quite simply, that the average difference, which shot up from almost zero at the height of the boom to as much as 30% last year, had fallen back to between 10% to 15% at the end of last year and has now dropped again to between 5% and 10% in most areas.”
Rogers said this means buyer and seller expectations are now much more in harmony than they were six months ago, which means a steady stream of sales.
The Homenet survey also underlined the correlation between overpricing and slow sales.
The group also identified its slowest-moving areas where sellers are “holding out” for what they want and the average asking-selling price difference is thus the highest.
These areas include Dainfern, Linden and Robertsham in Johannesburg; Magalieskruin and Arcadia in Pretoria; Tokai and the Fish Hoek mountain in Cape Town; Musgrave and central Westville in Durban; Summerstrand in Port Elizabeth; Beacon Bay in East London; and Heuwelsig in Bloemfontein.
Among the fastest-selling areas identified by the Homenet offices are Douglasdale in Sandton; Beyers Park in Boksburg; Witpoortjie on the West Rand; Doornpoort in Pretoria; Sun Valley and Ottery in Cape Town; Morningside and Dawncliffe in Durban; Quigney in East London and Fichardtpark in Bloemfontein.
The average asking-selling price difference in these areas was 5% or less.—Sapa