South African property market settles down
According to David Rogers, MD of Homenet, the difference in asking and selling prices in the property market is back to normal levels. Normal refers to 5% and 10% in most areas. In the middle of last year, the difference between the asking and selling prices were as much as 25% to 30%.
This decrease in the difference between asking and selling prices is good news for home buyers, and home sellers shouldn’t be too concerned either, as this means there is an increase in buyer interest and thus in sales activity.
According to First National Bank’s Property Barometer, more than 80% of sales taking place were for less than the asking price. In 2006, the interest rates began to rise and the goal of this index is to determine the current extent of the asking-selling price difference and whether it has changed since the rising interest rates occurred.
The difference started at about 30% last year, then fell to between 10% and 15% and has now dropped to between 5% and 10%. Among the fastest-selling areas identified by Homenet are Douglasdale in Sandton, Beyers Park in Boksburg, Sun Valley and Ottery in Cape Town and Quingney in East London. The average asking-selling price difference in these areas was 5% or less.
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