Anyone wanting to buy a property should consider doing so now because the difference between the asking price and the selling price is now 22%, the largest differential in 30 years claims Tony Clarke, managing director of Rawson Properties.
He warns that properties are currently taking between four and five months to sell whereas about a year ago it was taking between six and eight weeks. “To make matters worse, the market has been skewed by the large number of repossessed homes and distressed properties that are currently on sale,” says Clarke.
According to Clarke, many people who have had their houses repossessed by the banks actually had bonds of between 90% and 108% but the banks are now willing to settle for 10% below the bond value (not the house value) and he says as a result the actual decrease in house prices could be as much as 30% and maybe even more.
“There really are a lot of bargains on the market today for those buyers that have access to cash or can ensure that they will be granted bond finance by their bank,” he says.
Of course the picture does vary according to the suburb that individual buyers choose but Mike Abrahamse, franchise principal for the company’s Blaauwberg operation says that there are probably about 2000 properties on the market in Blaauwberg, Table View and Parklands areas.
“This means that the chances of a property not selling – or being withdrawn by frustrated sellers – is quite high because buyers probably have as many as 30 similar properties in the same price range to consider,” he says.
In the current market, says Abrahamse, only about 40% of the properties on the market actually sell and no amount of advertising or marketing is going to sell a property that is incorrectly priced, looks shabby, or needs a lot of remedial work or care.
He says that sellers should make certain that their properties are in top condition before putting them on the market. “At least 90% of buyers want to buy a house, move in and live in it comfortably. They don’t want to renovate. They don’t want to have to rebuild the kitchen or refurbish the bathroom,” he says.
He says that agents have a duty to educate the sellers and encourage them to spruce up their homes before even putting them on the market. Just R10k spent on painting, retiling or getting in a garden service will often add as much as ten times that to the purchase price,” he says.
Of course with so many properties on the market in the suburb it is perhaps surprising that The Beach House development – where a 38,5 sq m one bedroom apartment sells for R579k – is virtually sold out.
The development has ten units within three minutes’ walk of Blaauwberg beach and so far eight of these units have been sold. Purchasers have the option of having the units fully furnished on transfer.
Prices of up to R840k including a garage have been achieved for the two-bedroomed units. Some of these units are being rented out for between R800 and R1,300 a day during the peak seasons.
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