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South Africa in new sales spike

Wednesday, September 02, 2009

Source: Catherine Deshayes

Business is booming in some parts of the South African property market, it has been claimed.

Riëtte Oosthuizen of RealNet Centurion notes that there has been an increase in sales of 300% since the beginning of the year but ascribes the jump to refined marketing principles.

"There are still buyers in the current tough economic climate but the challenge is to find the right property for each buyer. We have refined our marketing approach to do just that and although it is still difficult to obtain bond finance, buyers are definitely showing more confidence in the market,"

Another RealNet franchise that has dramatically increased sales this year is the Garden Route office serving the greater George area. Owner Gerhard Roux reports an increase in sales of 200% since last November. "But this is because prices have declined sharply - in my opinion this is the first time in five years that local properties have been priced realistically," he says.

"The spike in sales is primarily due to a new realism in the market as sellers start realising that over-priced properties simply do not find buyers. And in spite of the increased activity, there is still some pent-up demand as many buyers are waiting for further price declines."

Sales at the RealNet Select office in the Western Cape have doubled since January and owner Astrid Smith says this is also largely due to discounted prices. "Sellers generally list at higher prices, but are willing to negotiate with buyers, leading to discounts of up to 20%.

"Speculators are active in the market and are buying properties at auctions at bargain prices. They then re-list such properties at a profit, but still at a price lower than general asking prices. First-time buyers are attracted by these discounts and are entering the market if they can obtain finance."

Rob Allan of the Randburg office also reports increased interest among buyers. "Three factors seem to contribute. In the first place prices seem to be bottoming out and buyers are targeting properties with market-related prices, of which there is a good supply.

"Secondly, the approaching Soccer World Cup has provided a sudden impetus and some investors have obviously decided now is the time to get into the market. And thirdly, buyers seem encouraged by signs that the banks, which clamped up in the face of the credit crunch, are slowly relaxing their strict lending criteria."

Source: Myproperty.co.za