Every market in the world operates on the basis of supply and demand. The same is true of the real estate market. When demand is strong and supply is low, then prices increase. When demand is low and supply is high, then prices decrease.
What we’re seeing in many markets is that economic pressures have drastically reduced the number of buyers in the market and their purchasing ability.
South Africa has just come out the other end of an election. There’s a lot of talk of government stability and the desire to stimulate the economy. But the reality is that solutions will take time to impact the man on the street. The economic factors that existed before the election still exist today. And they’re not pretty.
So what does this mean for you if you’re a serious seller? It means that the only way to obtain a result in this market is to listen to market feedback and make sure that you represent the very best value in your price range.
And I’m serious about being “the very best value”. In markets like these, the buyers will shortlist and view only the properties they believe represent the best value. So if you are not seen to represent the best value you won’t even get feet through your door. And without buyer enquiry and viewings there is no chance of a sale.
What if you have buyer viewings but you haven’t received any offers? That simply means you are attracting the wrong buyers. Because your price is too high, you’ve attracted buyers looking for a property that is bigger, newer, or offers more. They’re not offering on your property, as they’re not looking for a property like yours.
The buyers who are looking for a property like yours aren’t even calling your agent to view it.
Here’s the bad news: unless you change your price to attract the right buyers, nothing is going to change. I haven’t read one opinion from an economic expert that is expecting the South African economy and the property market to strengthen significantly in the next year or two. I’ve read plenty of sales pitches to suggest it will. But the cold reality is that this market we’re in now is here to stay for a while, at best. Let’s be positive and not consider the impact of a recession.
This is not doom and gloom. This is just a reality check. I believe that the property market is still the most resilient and represents the lowest risk. But if you want to sell in the next 2 years then you need a result now. The longer you take the less you sell for. Listen to the market. Be the best value, and you’ll sell.
Article extract courtesy: Steve Caradoc-Davies, General Manager of Harcourts International