Buyers urged to be realistic with offers as market rebounds
Category Expert Insight
The market has been busy for June and July, but buyers putting in offers that are too low and out of step with local markets are left disappointed, says Samuel Seeff, chairman of the Seeff Property Group.
As expected, the market has rebounded on pent-up demand with excellent trade reported under Level 3. Buyers who had been waiting to take advantage of the favourable conditions have wasted no time to physically view properties and get their offers in.
Across most primary housing areas, activity has been robust below R1.5 million, especially below R1 million where buyers are benefiting from an exemption of transfer duty, the low interest rate and favourable bank lending climate.
That said, the market is busy almost across the board including the luxury areas from around R8 million to R18 million. The result has been that for many areas, it has been the busiest period this year, and in some instances, activity has been on par with the same period last year.
Low offers can be a drawback for some areas. It is important for buyers to note that in many instances asking prices are already adjusted to the current market, especially in the low to mid-market sectors of R1.5 million to R3 million (in some sectors).
While generally a buyer’s market, there are very few desperate sellers. Most sellers are prepared to wait for the right price. While we are seeing some discounts at the top end of the market, there is very little below R1.8m with only the odd serious seller giving nominal discounts.
Buyers will need to be realistic with their offers or they may be left disappointed, especially in the low to mid-price ranges where properties are selling for close to, and often for full asking price.
That said, sellers should remain mindful of the economic challenges and impact that it will have on the market going forward. Given that the Reserve Bank expects the GDP to decline by 7% for the year, asking prices will no doubt remain in the spotlight. Where there is demand, sellers should take the opportunity to negotiate.
For buyers, there has not been a better time to invest in property in over thirty years. The latest interest rate drop has taken the mortgage loan rate to a new historic low of 7% while Ooba reports that the average bank deposit requirement is down y/y to 8.1% (from 13.2%) as at June.
Whether you are selling or buying in this market, your best advice is to speak to a credible local area agent who can provide the right guidance in terms of how the market is slanted.
Author: Gina Meintjes
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