25 Nov 2011
Homeowners in Plettenberg Bay hoping to sell their properties during the upcoming holiday season need to review their asking prices urgently.
According to Hein Pretorius, principal at Lew Geffen Sotheby’s International Realty franchise, Plettenberg is still one of South Africa’s premier resort destinations and most desirable places to own property.
“The property market has shown a substantial increase in buyer interest and activity over the past few months compared with the previous two years,” he says.
However, he warns that sellers who don’t want to miss this boat need to be sure that their asking prices are really competitive and realistic.
He says while there are more buyers around, most are astute investors who have recognised opportunities to buy at low prices.
These buyers and investors are reportedly acquiring bargains in this sought-after location and they stick to their guns on pricing because they know they have plenty of properties to choose from, he says.
Pretorius explains that there is still a serious oversupply of property on the market following the recession and that actual prices being achieved in the home sales taking place are between 25 percent to 30 percent off their 2007/ 08 peak, closer to pre-boom levels.
As an example, he says they sold a home where the owner netted R6.2 million after spending R8.3 million in 2008.
“I have also seen many other sellers who two years ago refused offers that they considered too low, now accepting even lower offers.”
He says this is a bad situation for sellers when one takes into account the time value of money, but it is what inevitably happens to properties that are overpriced.
Buyers avoid overpriced properties and after sitting in the market for a long time they end up being sold for less than would have been achieved had they been correctly priced in the first place.
Pretorius says there are many overpriced properties in Plettenberg because sellers are not realistic and not in touch with the local market realities.
“Plett is primarily a second-home market so many owners are out of touch because they don’t live here for much of the year.”
He says serious sellers should make sure that any valuations they are given are backed up with information about sales that have occurred in the past few months and get a second opinion if necessary.
Marianne Price, of APKF says although many home sellers still resist pricing correctly, a new realism is now being seen in Constantia pricing that hasn’t seen for a long time.
Price says for example, an upmarket Constantia home which is on the market at least R2 million below what would have been asked for it in the boom times of 2007/early 2008 now has a price tag of R12.9 million.
“That may sound a great deal of money but I can assure you it is an exceptionally good price for a home of this size and quality.”
The home which has a pristine all-white Cape Vernacular is set on a 2 329 square metre landscaped plot.
It has four bedrooms, three bathrooms, five reception areas and living rooms, a spacious study, a staff unit, two garages and six parking bays. – Denise Mhlanga
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Denise MhlangaProperty journalist at property24.com
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