08 Nov 2012
While a good property that is priced right will sell at any time, the summer months are historically regarded as the best time to put your home on the market.
This is according to Seeff chairman, Samuel Seeff, who says demand tends to spike from about October onwards with a notable increase in buyer enquiries and show house attendance.
Annual bonuses, salary increases and job promotions also impact demand in the latter and early part of the year as homeowners start thinking about upgrading or downscaling. This is also when adult children start thinking about leaving home or heading off to university leaving empty-nesters to start looking around for smaller accommodation or even a move to the countryside or coast, he says.
Those who find the economy tough will also now look to downscale to a smaller home, more affordable neighbourhood or perhaps consider moving into rental accommodation for a while. First-timers will usually start thinking about getting a foothold in the property market.
Although the season is important, sellers need to consider the impact of the prevailing economic climate, says Seeff. While smart sellers will get their property listed as soon as they can, they need to look at longer mandates given that buyers are still taking their time before putting pen to paper.
On average properties are still spending just under 16 weeks on the market compared to less than half of that time before 2007/8. Pricing is yet another vital consideration. Buyers are smart and know what they are looking for and at what price. If the price is unrealistic, they will often walk away rather than putting a lower offer in. Almost across the board, pricing is one of the most critical factors and heeding the advice of a credible real estate agent in terms of what is selling right now and at what price is more important than ever, he says.
While market conditions remain subdued, Seeff says that it is business as usual in the mid-market sectors with buoyant demand, especially in the affordable price bands below R2 million. High household debt levels continue to bear on the ability of banks to grant more home loans, but buyers who are in good credit standing and are able to put down a cash deposit, are taking advantage of the favourable buying conditions.
"Our agents are certainly reporting that there is a more positive sentiment in the market and that the low interest rate has spurred increased activity and a willingness to buy. We are now even beginning to see stock shortages in the affordable areas," he says.
He says their licensees across the major metropolitan residential areas report that smaller, often starter homes and sectional title properties priced below R800 000 are most in demand with about 60% of all demand falling into this category. This is followed by family homes with small to medium sized gardens, townhouses and apartments priced up to R1.5 million which represents about 25% of current market demand.
There also seems to be good uptake in new developments that offer affordable homes, driven largely by the low barriers to entry. Costs are usually included in the sales price and these developments are often pre-approved with the major banks willing to grant sometimes up to 100 percent bonds, especially for first-time buyers.
School belt areas and suburbs with good transport access to business nodes in particular continue to see demand. Security and lower maintenance cost also remain key considerations for buyers, says Seeff. Well maintained properties that make the right impression tend to attract more buyer interest, but he says that in the more upmarket areas, buyers are snapping up older, often slightly cheaper properties with the view to renovating these.
With market conditions unlikely to shift to any significant degree for the foreseeable future, Seeff says that a new market reality with normalised pricing has set in. The low economic and employment growth, rising costs and inflationary pressure and high household debt levels combine to create subdued property market conditions.
There are buyers out there and there is a willingness to buy, he says. "There is little point in waiting if you want to or need to sell as the market is unlikely to make any dramatic upturn at least for the next 18 months. Even then, pick up will be gradual and we are unlikely to see a return of the 'boom' conditions that prevailed in the 2004 to 2007 period for some time."
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