Auctions reflect positive reaction form rate cuts

CENTURION (April 28) – The first signs of the recent interest rate cuts of 2,5 percentage points is having a gradual, but positive effect on Centurion’s townhouse-dominated market, according to Nic van den Berg, Broker/Owner of RE/MAX Jowic, whose observations are based not on private sales, but on recent local real estate auctions.

A key market pointer from his observations of auctions is that the average knock-down prices on homes in March were 10 to 15 percent higher than in the previous two months, which he attributes to the 2,5 percentage rate cut since December now filtering through to buyers pockets.

Residential properties passing through the local sheriff’s auction as a result of bank repossessions were being sold in February at an average of between 40 to 50 percent of market value, but the differential has since shrunk from March to about 25 percent to 30 percent.

Even so, Van den Berg says auctions still offered tremendous value, although about 50 percent of the advertised stock was often withdrawn by their financially distressed buyers coming to a last minute agreement with their bank.

He advised those owners in peril of repossession to act swiftly with the banks in reaching extended payment on their bond thereby reducing current repayments.

Interestingly, he notes, that Standard Bank have recently launched a service which in response to any of its borrowers SMSing the word 3DB to a certain cellphone number automatically extends the life of that bond to a 30 year period.

RE/MAX Jowic, one of the major real estate players in Centurion, concluded 38 sales in March, of which only eight, or 21 percent, were granted bonds. This figure could improve as some applications were still being processed.

Van den Berg, a 30-year industry veteran says that buyer demand remains firm, showhouse attendances are bristling with a 60 percent increase in visitors and the quality of buyer is substantially higher than a year ago. Most of them, he points out are now taking the National Credit Act extremely seriously and are fully aware of their commitments.

Article from: www.rodneyhayter.com