In­flex­i­bil­ity won’t sell prop­er­ties

Weekend Argus (Saturday Edition) - - PROPERTY -

THE PROP­ERTY mar­ket is turn­ing, but things are still a far cry from be­ing a seller’s mar­ket and the warn­ing from the prop­erty ex­perts is that buy­ers and sell­ers need to be re­al­is­tic in their pric­ing if the deals are go­ing to hap­pen.

Ger­hard Kotzé, CE of the ERA South Africa prop­erty group, says buy­ers have sensed an im­prove­ment in the mar­ket and are pre­pared to make of­fers.

“On the other hand, some sell­ers wrongly be­lieve that a seller’s mar­ket has al­ready ar­rived and that they can ask for prices that are 20 to 30 per­cent higher than a year or so ago. There is a mid­dle ground for buy­ers and sell­ers right now, but ‘never the twain shall meet’ if they both stub­bor nly cling to their re­spec­tive pric­ing points of view.”

He says there is no ques­tion that the mar­ket has perked up com­pared with the dol­drums of a year ago, but that it’s a far cry from the 25-30 per­cent an­nual growth at the height of the last prop­erty boom.

“That’s notwith­stand­ing the lat­est FNB House Price In­dex’s yearon-year re­port, which in­di­cates that house price de­fla­tion con­tin­ues to di­min­ish at a steady pace. The bank be­lieves year-on-year house price de­fla­tion will prob­a­bly be a thing of the past be­fore end of the year, and that this is a strong sign that the pos­i­tive im­pact of lower in­ter­est rates is start­ing to be felt in res­i­den­tial prop­erty per­for­mance.

“Our view is that the mar­ket is roughly in equi­lib­rium and, in such a mar­ket, deals are best fa­cil­i­tated by com­pro­mise.”

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