There are, says Gerald Romanovsky, Manager of Greeff Properties' Hout Bay branch, clear signs that the recovery phase in property prices, long awaited by so many Hout Bay residents, is now under way.

"We recently had over 30 enquiries for a single property and three offers in less than three weeks. We are also seeing an influx of potential foreign buyers who have not been around for two years. The market is definitely more optimistic than in 2009," said Romanovsky.

“Normality has returned and the year ahead will see price growth matching and possibly exceeding the inflation rate. SA property will not “rocket up” in price nor will it enter a boom period soon.”

"This is something that sellers have to appreciate," said Romanovsky. "As soon as things look more promising they start demanding higher prices - which are not yet obtainable."

Romanovsky said that although he and his staff have in-depth experience of valuations, sellers are inclined to ignore even the most scientifically calculated valuations and price on ‘hearsay’ and ‘dinner talk.’

"Any professional estate agent," said Romanovsky, "will give the client a carefully calculated comparative market analysis to justify the valuation he is putting forward. This will be based on the prices actually achieved, the asking prices for similar properties in the area, the municipal valuations and the agent’s subjective feel about the property. This analysis may be complemented by an apportionment analysis (calculated on annual increases from a specified time) and/or by a replacement cost valuation. This information allows the seller, if he is serious about selling, to set a market related price that will result in a sale."

Quite frequently, however, says Romanovsky, the seller is just testing the market and is not in a hurry to sell, “a very costly exercise” for any agency.

"Experience has shown that the five 'Ds', divorce, death, departure, debt and downsizing create good conditions for a sale. Where these are not evident, it is likely that the seller will try for too high a price. If the agent agrees to go along with this, what all too often happens is that he/she struggles for six months, then loses the mandate to another agent who is allowed to sell at the right price and who then reaps the benefit of the first agent's advertising and time."

Right now, says Romanovsky, it is still taking four to five months to sell the average Hout Bay home, but he predicts this will shorten to three months by the year end.

The properties on Greeff's Hout Bay list are priced from R1,3 million to R16 million.

“It is still possible to get a good two or three bedroom home in Hout Bay for R2 to R3,5 million - so this is still an area where the growth potential is very good.”

Article by: www.greeff.co.za