Experts say selling prices are unrealistic

By Staff Writer

Home sellers who don't want to lower their asking price will struggle to make a sale since the debt-ridden South African public will continue to avoid buying high-priced houses. This is according to First National Bank's (FNB's) property analytics department.

According to FNB housing specialist, John Loos, the residential property market is jampacked with homes which are struggling to sell.

"Asking prices are still too high given the weak level of residential demand," said FNB housing specialist John Loos.

He said surveys of estate agents for the review point to an unrealistically priced market.

The report revealed that the average time of a house on the market is 15 weeks and four days, which is almost double the eight-week time period from 2005 and 2006.

"There is a lack of realism in the market," said Loos. FNB estimates that 81% of sellers had to lower their asking price to make a sale in the third quarter, compared to 30% in 2004, which recorded the lowest average fall in selling price.

The estimated average drop in asking price was 12% for the third quarter of 2010.

Loos said that the household's sector's lack of interest might result in lower house prices which is good news for those looking to invest in property but bad news for home owners who will be forced to sell at a possible loss.

"Indications are that the supply of existing property is strong, with high levels of financial stress-related selling. Indications are also that residential demand is currently weakening. That leaves a price decline as seemingly the logical outcome," he said.

"We retain the expectation of average price decline for 2011 as a whole," said Loos.

Recent Articles

Featured Rating agencies may come knocking

It is only the middle of February, but the rand has already made two big moves. The first was the rand moving from R14.60 to R 13.20 at the beginning of the year, as emerging markets (EM) became fashionable again. The second was where the rand gave away nearly 90 cents in 2 weeks as the EM rally ran out of steam, and local events started to hit the headlines.

Read more

The cost of sending money home to neighbouring countries

Transferring money home within the Southern African Development Community (SADC) provides vital financial support for many households in neighbouring countries.

Read more

Student bank accounts: Which come out on top?

Being a student signals budgeting and not having a lot of money at your disposal. This means streamlining expenses such as your grocery costs and entertainment budget. But what if your bank account is in fact costing you more than you can afford?

Read more

Can you afford an ambulance in South Africa?

When a loved one is straddling the line between life and death, you won’t hesitate to call an ambulance. This week, Justmoney found out how much an ambulance ride costs in South Africa, whether you can refuse to get into an ambulance, and who pays the bill if you’re unconscious. 

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

President Hotel Easter Special

Price: From R1,500
When: 15 March to 30 April
Where: Cape Town

Kulula-Preskil Island Resort Special

Price: R16,999
When: 11 May -14 September
Where: Mauritius

A Touch Of Madness Tuck In Tuesday Special

Price: R70
When: Tuesdays
Where: Cape Town