Residential sellers still not facing reality

Lanice Steward, MD of Anne Porter Knight Frank, has drawn the attention of property sellers to figures in the latest FNB Residential Review which indicate that properties now remain on the market significantly longer than previously. Just over 80% of residential properties now take up to four months to sell. Only the sales rate in the lower income groups remains stable, with homes taking on average eleven weeks to sell.

Eighty-five per cent of homes, said Steward, now sell below the asking price and the average length of time taken is 15 weeks.

These figures, said Steward, should be seen in context – they could be just as much a reflection of sellers’ unwillingness to face up to market realities as of any other factor.

“At Anne Porter Knight Frank,” said Steward, “our experience has been that in the vast majority of cases slow sales are the inevitable consequence of the seller ignoring the pricing advice of the sales consultant. Time and again we have found that sellers believe their property or their area is somehow special and not affected by market conditions in the same way as others. We then bow to the pressure, agree to try for the unrealistic price – and find, after weeks of frustration, that the home eventually sells below its true market value, i.e. for less than the price the seller would have got if he had taken our advice at the start of negotiations.”

If sellers doubt an agent’s valuation, said Steward, they should ask for an analysis of similar homes sold in their area.

“Any good agent,” said Steward, “will have this data at his fingertips and should be able to justify his estimate to within 8 or 10%.”

Steward added that confidence in high value prestigious properties, in Upper Constantia for example, is still at a high level and, as these properties have also had to drop prices by 20 to 25% to get a sale, they now offer really excellent long-term investment prospects - “as good as any in the world”.

“My optimism in these matters,” she said, “is increased by the conviction that in our areas we are now seeing the market bottom out – way ahead of the predictions of FNB and others for SA as a whole.”

This, she said, is not the first time that Cape property has proved more resilient than that of Gauteng and KZN in the face of a downturn.

“By the end of this year I see buyers being a lot keener and prices beginning to rise. In the prime areas this trend will be speeded up by the dire shortage of land for new developments.”

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