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Why waiting to sell home won’t help you

20 Jul 2010
Potential sellers who are holding out for much better prices, will eventually be disappointed for two reasons.

Lanice Steward, managing director of Anne Porter Knight Frank (APKF), says although house prices are indeed showing good signs of recovery, buying and selling in the same market levels the playing field.

“I’m finding that some clients want to hang back about putting their properties up for sale in the belief that, if they wait another six to 12 months, they will get a far better price.

“While there is some truth in that idea, it should always be borne in mind that if you are selling to buy another home, the new property will almost inevitably also have increased in value. And if you are planning to upgrade, the gap between the price you get and what you will have to pay will in fact be bigger as conditions improve.”

For these reasons, said Steward, it is not advisable to delay the transaction.

“Sell now if you intend to re-buy in the same market has always been sound advice,” she said.

Steward says this also applies to retirement properties as units in retirement villages are often in short supply.

“I know of several couples who, having delayed their decision to move for a long time, are now on lists that could involve a five or six year wait before they actually gain admission.”

The second reason is that the real growth has already occurred.

Jacques du Toit, property economist at Absa, says the SA property market has seen strong price growth in the first half of 2010 and this growth is likely to taper off in the second part of the year.

“However, prices will probably rise by a fairly robust 10,5% during the course of 2010.”

He says the small segment of the housing market has recorded the biggest price rise, largely because affordability came under pressure in the second half of 2009 and into 2010.

In a previous statement on possible house price rises at the Cape, Steward said that she expects the increase to be in the region of 6% to 8% this year, i.e. ahead of the inflation rate for the first time in three years. – Eugene Brink

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