How to value accurately in today's market
Cape estate agents face a challenge - how to value accurately in today's market
In the current residential property market, says Anton du Plessis, CEO of Vineyard Estates, it is difficult to give an accurate valuation.
Throughout my career, said du Plessis, I have found that when the market is turning, valuations can prove to be inaccurate within a few weeks of being given.
Many Cape Peninsula agents, he said, are now reporting an upswing in enquiries and an increase in buyers. This, he said, is in large part due to the banks growing readiness to advance money for bonds.
We recently had a buyer who was given a 100% bond on a R2,5 million home. This would have been out of the question only six months ago.
Any agent making a valuation now, said du Plessis, has to take into account that since ± 10th January sales have definitely been rising week by week but no good analyst likes to base his valuation on figures that are only three or four weeks old.
January figures from the Institute's property sales database, Propstats, show a definite upswing but it is still too early to extrapolate future trends from these. Propstats logged 18 January sales in Rondebosch at a total of R38,4 million, six in Newlands at a total of R16,8 million, six in Kenilworth at a total of R4,58 million, 22 in Claremont at a total of R43,8 million and six in Constantia at a total of R27 million. Bearing in mind that at least a third of January consisted of school holidays, the figures represent a healthy start to 2010, and indicate that the market has bottomed out and is beginning to rise. It must also be taken in to account that whilst all of the larger groups are contributing data to Propstats, some of the smaller players are not yet, so the data is not fully comprehensive.
Figures from the Deeds Office, added du Plessis, will give a more complete picture but they will only become available at the end of the sales transaction process: this years January sales details might not appear on the records until March or April.
In the circumstances, said du Plessis, a good estate agent will take care to explain to his sellers exactly what formula or rise in buyer activity he has worked on to price a home now coming on the market.
Based on the January data and on the level of activity and interest the market is showing at present, I think we will see a growth of 5% by 1 January 2011.
Article by: www.vineyardestates.co.za