Kzn Homeowners Offload Properties

EmailEmail Print Share

07 Nov 2007

Property shedding by cash-strapped home owners in the Pinetown area is gaining momentum as a result of an upwardly mobile interest rate that has jumped seven times in just 16 months.

So says Mike Bennett, managing director of Durban's largest independent property group ProProp. To this he adds that those who had bought homes two and three years ago and then dipped further into their bonds to finance vehicles and luxury purchases, were now increasingly in danger of defaulting on their monthly bond repayments and possibly losing their homes.

Commenting on the current state of the Pinetown market, where properties range in price from R400 000 to R1 900 000, Bennett says that entry level and top-end owners tend to be those least affected by the spiraling rate. Rather, the correspondent lack of affordability is hitting those in the lower and middle markets as evidenced by the offloading of homes in the R500 000 to R900 000 range. Many of these are investment properties where monthly rentals are no longer servicing the bonds, he notes.

Bennett adds, however, that people's eagerness to get rid of debt they can no longer comfortably afford is blinding them to the dangers of over-pricing. Calling for valuations from two or three estate agents, they are then mandating the agent who gives them the highest valuation to sell their homes.

"Inevitably, these properties don't sell. In days gone by, not selling may have been irritating and disappointing but it wasn't the end of the world. For struggling home owners today, though, the longer their property takes to sell, the more debt they are likely to accrue and hence the worse their financial situation becomes.'

According to Bennett, right-priced properties in the Pinetown and Queensburgh areas should sell within three weeks. "If a house has not sold in this time scale, the seller must re-assess his asking price." In support of this, he cites a number of examples, including a house in Ashley in Pinetown, which, despite the seller's straitened circumstances, is not moving.

He explains: "Having received valuations ranging from R880 000 to R1 085 000, the seller awarded a mandate to the agency that promised him the best selling price. Three months down the line, the house still hadn't sold and the seller was now in a panic, no longer able to meet his monthly bond repayments and not far from having the property repossessed. He then dropped the asking price by 15%, the result being that the property sold three weeks later."

Bennett says another example of extreme over-pricing is unfolding in Hatton Estates, where members of Network Listings (NL) valued a house at R1, 080 million. The seller, however, has put it on the market for R1,9 million, which Bennett says is R800 000 over-priced and extremely unlikely to sell as a result.

Sympathetic to struggling bond holders, Bennett advises those who are battling to cope financially to meet urgently with their bank managers and be honest about their financial situation. "This could not only stop the bank from foreclosing on the property but could also result in arrangements being made for bond holders to reduce their monthly installments until the house is sold," he says. "Being honest and upfront about financial problems will hopefully keep the sheriff away from your door."

Readers' Comments
Have a comment or question about this article? Email us now..

Related articles
  • Port Edward coming to the fore.

  • Buying surges in KZN's Hilton.

  • KZN's Richmond is born again.

  • Looking for a new home?
    To find a property to buy, visit Find a Property and view listings of properties in all areas. Check out Property Reports and get an affordable online report on actual sold prices of properties in your area.

    Property News
    Click here for more property news articles.

    Need a blog?
    Start your own blog with a free blog from

    Similar Articles

    Located between Cape Town and Cape Point, Hout Bay offers...

    Are you a sophisticated, modern professional ready to get...

    We think of lavish mansions adorning the mountain slopes,...

    View all articles

    Top Articles

    Located between Cape Town and Cape Point, Hout Bay offers...

    Allergies are notorious for causing itchy eyes, sneezing...

    Are you a sophisticated, modern professional ready to get...

    View all articles
    Top Articles
    06 Feb 2016
    Located between Cape Town and Cape Point, Hout Bay offers investors a wi...
    05 Feb 2016
    Are you a sophisticated, modern professional ready to get a foothold in ...
    05 Feb 2016
    Comprising 2 000sqm and 29 shops, Blouberg Mall in Kareedouw in the East...
    05 Feb 2016
    Fine & Country Zimbabwe recently opened a new office in Borrowdale, an u...
    05 Feb 2016
    We think of lavish mansions adorning the mountain slopes, but you can st...
    Get the latest property news.
    Select your options:

    Your browser is out of date!

    It looks like you are using an outdated version of Internet Explorer.

    If you are using Internet Explorer 8 or higher, please verify that your Internet Explorer compatibility view settings are not enabled.

    For the best browsing experience, update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox.

    Please contact our Property24 Support Team for further assistance. Tel. +27 (0)861 111 724