www.sothebysrealty.co.za on 2009-10-30"color:#ffffff" href="http://www.sothebysrealty.co.za" target="_blank"> www.sothebysrealty.co.za on 2009-10-30" />
Buy signals now unequivocal, says Geffen

It’s time to officially call an end to the recession – at least in the real estate sector.

So says Lew Geffen, chairman of Sotheby’s International Realty in SA, who notes that the company’s “strike rate” of properties sold as a percentage of those advertised has been back up to 20% for the past three months.

“This means that one in five properties we advertise each week is being sold, compared to just one in 12 late last year, before interest rates started to fall, and one in seven earlier this year.

“And considering that the weekly strike rate was two or three in five at the very height of the last boom, I think we can safely say now that the market is well on its way to recovery.”

For home sellers, he says, this does not mean that prices are immediately going to bounce upwards, “but it does mean that well-priced properties are going to start selling much more quickly and easily, because demand is on the increase once more. In fact, the average listing time has already fallen back to 90 days compared to 120 days and more last year.

“The most important factors that come into play here are lower interest rates which mean that prospective buyers have more disposable income, and easier access to home finance now that the banks have somewhat relaxed their credit restrictions.”

Meanwhile, Geffen says, buyers should be aware that the “first ship heading for the property upturn is already pulling away from the dock”, and that now is the time of maximum opportunity in the market, especially since the supply of homes for sale is likely to dwindle quite quickly due to a sharp decline in new building activity over the past two years.

“If you buy now you’ll still be able to obtain excellent value for money in most areas, and at the same time maximise the potential for gain as demand starts to exceed available supply and prices do start to rise.”