Homeowners looking to sell their properties this year should not be put off by the state of the property market. Although the market favours buyers, there are many situations where selling as soon as possible could still be the best decision.
Seller circumstances are “so individual” and South Africa’s political and socio-economic environment “so unsettled” that Paul Stevens, chief executive of Just Property, says it is dangerous to make blanket judgments. Rather, homeowners wanting, or needing, to sell should look at deeds office data for sales trends in their areas.
This will tell them whether properties in their areas are achieving good sales prices, or if there is a downward slide. Stevens is optimistic the market will begin to turn in favour of sellers in the second half of the year.
Currently, however, there remains a strong demand for primary homes, says Tim Greeff, regional sales director for Greeff Christie’s International Real Estate.
There is also a “situational demand” as many homeowners looking to buy new properties will need to sell current homes. While the market is dependent on macro-economic factors, such as Eskom and a potential Moody’s ratings downgrade, people “always need to buy and sell”.
“Demand needs to catch up with the supply and, right now, there is more supply. It needs to balance out.” Greeff believes this could occur towards the end of this year and into next year.
Whether sellers choose to wait until the market turns or list their homes sooner also depends on the reason for selling, say Claude McKirby and Arnold Maritz, co-principals for Lew Geffen Sotheby’s International Realty in the Southern Suburbs.
The urgency linked to the situation will have a big influence on the decision. “In a buyer’s market, every property is competing with a significant number of other properties for the attention of a limited number of buyers. If there is not a strong and urgent reason for selling and the property owner is of the opinion that the market will turn and that selling prices will begin to increase sometime in the short to medium-term future, then it could be better to wait before putting their property on the market,” says McKirby.
Once the decision to sell has been made, he advises sellers to proceed as soon as possible with the support and guidance of an experienced real estate agent.
“Remember, you will also benefit when purchasing in the current market.” As the political and economic situations in the country are the “most critical and important” factors influencing the current market, Maritz says it is not known when it will turn in the seller’s favour.
He says: “A positive change will instill confidence back in the property market and get investors, second home buyers, developers and buyers upgrading to start investing back into the property market. This change could result in the buyer’s market changing into a seller’s market again over a period of time.” Sellers might, however, be wise to sell their properties as soon as possible, says Richard Hardie, chief executive of Knight Frank SA.
“We expect the market to get busier and, obviously, as demand increases stocks will decrease. The only advice to sellers is to make sure their properties are realistically priced. Then they will sell. The properties that are not selling are properties which are overpriced.”
He believes the market will turn in about the third quarter of this year. While it might take longer to sell property in the current market, Pieter Janse van Rensburg of Just Property Cape Town believes the market will turn to favour sellers by the second half of the year.
He says this depends on the political and economic climate in the country and on investor confidence.