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11 February 2016

How to bounce back from overpricing a property
Rawson - South Africa
Accurately valuing a property is as much an art as it is a science, and finding that magical number can have a dramatically positive effect on the ease and speed of a sale.

Unfortunately, getting it wrong can have an equally dramatic effect on a listing says Bill Rawson of the eponymous property group.

"Overpricing a property is one of the worst things you can do when attempting to sell," he explains. "It almost always results in a property that lingers on the market, causing buyers to wonder what kind of hidden flaw has left it unsold for so long. This stigma can be almost impossible to shake, and usually ends up with the property being sold far below its real market value, many months down the line."

The first signs that you may have overpriced your home include a general lack of interest, no offers in spite of holding plenty of viewings, or several offers well below your asking price. "Ask your agent to pass on any feedback from people viewing your home, including comments on value and pricing," advises Rawson. "This can give you great insights into where you fit into the market in the minds of potential buyers, and can help you reassess your asking price if your property is not faring well."
How to bounce back

The myth of 5-6% p.a. house price growth – it was only 1% p.a.
HomeBid - South Africa
The man in the street is not getting the full picture. He is being told by the banks, mortgage originators and estate agents that average home prices increased by between 5% and 6% per annum in 2015, when in actual fact, they only increased by 0.94% per annum. This is according to Neville Berkowitz, property economist and adviser to low-commission estate agency, HomeBid.

Even the South African Reserve Bank is using this incorrect information in its assessment of home price inflation which it estimates at the inflation rate of 5.2% p.a. for 2015, according to the December 2015 Reserve Bank Quarterly Bulletin.

“The discrepancy lies in the limited sample of sales and transfers used by these market commentators,” says Berkowitz. “We, however, analyse every single home sold and transferred in all the deeds offices around the country: 289,613 in 2015 and 290,257 in 2014.
The myth of 5 Percent

First quarter 2016 Housing review
Absa - South Africa
With the financial pressure on consumers expected to increase this year, the demand for rental property may rise and lead to higher rentals. This may cause an increase in investor demand to buy rental property, with some upward pressure on prices in this segment of the market.

The general outlook for nominal house price growth is to remain in the single digits for the next two years, with the risk for price growth to the downside against the background of trends in and prospects for the economy and the household sector. Based on expectations for nominal house price growth and consumer price inflation in 2016 and 2017, real price deflation is projected over the 2-year period.

Growth in the value of outstanding household mortgage balances will be a reflection of interest rate trends, the state of household finances, consumer confidence and property market conditions, with continued low singledigit growth in mortgage balances expected over the next 12 - 24 months.

Factors related to the economy, household sector, confidence, development land, building costs, property rezoning and municipal services will remain important drivers of the demand for and supply of new housing and consequently levels of residential building activity across the various segments of housing. Residential building activity has been relatively subdued in recent years, and no major improvement from current levels is expected in the next year or two against the background of trends in and the outlook for the economy and the household sector.
Housing Review 2016 Q1

The effect of an interest rate hike on the commercial property market
An interest rate hike is never good news for anyone, except for those with cash invested in the bank. Nevertheless, they do occur and investors in the property market should be aware of how this will affect them.

Jason Gregoriades, a member of the Rawson Property Group’s Commercial Business Development Team, says its important to first look at the challenges of commercial property investment but always bear in mind that there are many benefits too.

"When considering commercial property to begin with," says Gregoriades, "one must realise that the deposit required by the bank, which is approximately 30 to 35% of the total loan, is far greater than what is required for a residential property (approximately 10%). In addition, getting finance for commercial property requires your property portfolio's net income to service the bond instalment.”
Rawson

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