Real Estate News – Sellers get real

Survey taken by the Rawson Property Group has shown that the long-awaited realism in the pricing of houses for sale is now taking place — and buyers’ interest is consequently picking up.

Some 15 percent of the Rawson franchises in the Western Cape were asked a series of questions about recent attendance figures at show houses.

“We came to the conclusion,” said Bill Rawson, “firstly, that more realistic pricing in most areas has boosted show house attendance and, secondly, that those visiting the show houses are now more likely to be serious, well-informed buyers intent on finding the reasonable prices that they believe are once again possible. The recent rise in interest rates has not deterred them nor are they put off by the prospect of a further rate increase.”

Some of the franchises reviewed confirmed that they have definitely witnessed a pick-up in show house attendance over the last few weeks. The City Bowl and Durbanville franchises had quick sales at their show houses, while Annatjie Verster, the Durbanville franchisee, stated that between 60 percent and 70 percent of her show houses had already been sold.

This indicates, said Rawson, that show houses still remain one of the most effective ways to market properties. “Buyers can view houses at their leisure, in comfortable clothes, without setting up an appointment. Furthermore, they are under no obligation to take further action.”

George Hayes of the Lower Claremont franchise reported that sellers no longer expect ludicrously strong prices. Buyer interest, he said, has consequently revived. This was corroborated by Trevor Weston-Green of the Newlands franchise who said that all new property releases are attracting interest and it is only those properties with too high prices that stick on the market.

“Franchises that are experiencing a slow-down in the market, attribute this to normal seasonal trends, and do not feel that increased interest rates are putting people off from buying property,” said Rawson. “The survey and other evidence (for example, the latest RPPR report) indicate that the demand graph is now bottoming out and is set to take an upward turn before the year-end.

“Informed buyers are taking advantage of the levelling-off of prices to get into the property market now, while prices are stabilising. The stabilising trend, which has been visible for a few months, is not due to economic factors like the interest rate hikes, but purely the result of the affordability factor. Salaries have not increased at the same rate than houses and, the too high prices were therefore quite simply beyond many buyers’ means.”

“Certain people,” he said, “are bewailing the 'mere' 12 percent year-on-year increase in values — but, as the Standard Bank 2000 to 2006 graph shows, this is still, even in real terms, far higher than the increases of the US, France and the UK.”

Article from: