Ap­ply dose of re­al­ity

Sell­ers in Plet­ten­berg Bay are urged to catch the wave by pric­ing cor­rectly. Michelle Swart finds out more

Business Day - Home Front - - HOMEFRONT -

HOME­OWN­ERS in Plet­ten­berg Bay who are hop­ing to sell their prop­er­ties dur­ing the hol­i­day sea­son need to re­view their ask­ing prices ur­gently, says Hein Pre­to­rius, prin­ci­pal of the lo­cal Sotheby’s In­ter­na­tional Realty fran­chise

“Plett is still one of SA’S premier re­sort des­ti­na­tions and most de­sir­able places to own prop­erty, and the mar­ket has shown a sub­stan­tial in­crease in buyer in­ter­est and ac­tiv­ity over the past few months com­pared with the pre­vi­ous two years.

“How­ever, sell­ers who don’t want to miss this boat need to be sure that their ask­ing prices are re­ally com­pet­i­tive be­cause the truth is that while there are more buy­ers around most are as­tute in­vestors who have recog­nised that there is an un­usual op­por­tu­nity now, while prices are down, to ac­quire a bar­gain in this sought-af­ter lo­ca­tion and they stick to their guns on pric­ing be­cause they know they have plenty to choose from.”

He says there is still a se­ri­ous over­sup­ply of prop­erty on the mar­ket fol­low­ing the re­ces­sion and that ac­tual prices be­ing achieved in the home sales that are tak­ing place are still about 25% to 30% off their 2007/2008 peak — that is, closer to pre-boom lev­els.

“For ex­am­ple, we re­cently sold a home where the owner net­ted R6,2m af­ter spend­ing R8,3m in 2008. I have also seen other sell­ers who two years ago re­fused of­fers that they con­sid­ered too low now ac­cept­ing even lower of­fers.

“This is a bad sit­u­a­tion for them when one takes into ac­count the time value of money, but it is what in­evitably hap­pens to prop­er­ties that are over­priced. Buy­ers avoid them and they be­come stale af­ter be­ing on the mar­ket too long, at which stage they can usu­ally only be sold for less than would have been achieved had they been cor­rectly priced in the first place.”

Pre­to­rius says there are many prop­er­ties in Plett in this cat­e­gory and that part of the prob­lem is that their own­ers are of­ten not re­ally in tune with the re­al­i­ties of the lo­cal mar­ket.

“Plett is pri­mar­ily a sec­ond-home mar­ket so many own­ers are out of touch be­cause they don’t live here for much of the year. On top of that, many lo­cal agents don’t seem to re­alise how dra­mat­i­cally the mar­ket has changed. You can­not value a prop­erty in the cur­rent mar­ket here by us­ing sales val­ues from two years ago.”

He says se­ri­ous sell­ers should make sure that any val­u­a­tions they are given are backed by in­for­ma­tion about sales that have oc­curred in the past few months, and get a sec­ond opinion if nec­es­sary.

“Of course no-one wants to hear that their prop­erty is worth less than they thought, but that is far prefer­able to hav­ing an agent who tells you what you want to hear and then brings you of­fers far be­low their own val­u­a­tion, if at all.”

Data sourced from Light­stone shows that 45,24% of re­cent buy­ers in Plet­ten­berg Bay have been be­tween the ages of 18 and 35, while 47,37% of re­cent sell­ers have been aged be­tween 36 and 49.

Con­tact:

Lew Gef­fen Sotheby’s In­ter­na­tional Realty Hein Pre­to­rius 083 701 3159

A mod­ern beach­front home in a gated es­tate on Keur­booms Beach that in­cludes four bed­rooms, four bath­rooms and a dou­ble garage. The ask­ing price has been re­duced from R18m to R13,9m, left. New three-bed­room, twobath­room apart­ments in up­mar­ket Thu­lana...

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