Nearly 90% of home sellers are unable to sell their properties at the asking price, reflecting declining property prices in a high interest-rate environment.
Released on Monday, the second-quarter First National Bank (FNB) Residential Property Barometer showed 85% of sellers are unable to meet their sales target, up from just over 81% in the first quarter of the year.
“While a bulk of sellers of investment properties are getting prices above what they paid, the percentage of sales at lower-than-buying price continues to rise,” said John Loos, a property strategist at FNB.
During the quarter to June, less than 3% of home sellers got a 30% premium on the property’s purchase price, compared with nearly 10% of sellers in the quarter to March and more than 10% in the quarter to December last year.
Nearly 10% of buyers earned 20% more on the purchase price during the second quarter, little changed from quarter one 2008 and down sharply from more than 30% of sellers that earned the same premium in quarter four of 2007.
The bulk of sellers in quarter two of 2008, about 52%, obtained 10% more on the purchase price of their property, down slightly from nearly 60% of sellers who earned the same margin in quarter one 2008 and up from 40% of sellers in quarter four of 2007.
Thirty percent of buyers did not get any return on the sale of their property in quarter two of 2008, up slightly from just over 20% in quarter one of 2008 and up markedly from about 10% in quarter four of 2007.
Some sellers sold at a loss. Although the number is still low, it is rising. In quarter two of 2008, nearly 10% of sellers sold at less than the purchase price, compared with just over 5% in quarter one 2008 and virtually nobody in quarter four of 2007. — I-Net Bridge