While the local property market – particularly in the northern suburbs of Johannesburg – is starting to turn, it is still the buyers who determine the price.
This means that sellers need to be aware that market-related pricing is crucial to the success of their home selling. This is according to Debbie Justus-Ferns, manager of Renprop Residential Resales, who says that buyers are still price sensitive and are looking for value-for-money properties that cater to their specific accommodation requirements and have good finishes.
“Consumer behaviour,” she says, “strongly indicates that buyers won’t even bother putting in an offer on a home that is overpriced and will rather look around to find something that has a more realistic price tag.” Justus-Ferns says that sellers often think that if they set a higher price for their property they are ensuring some negotiating room, but all they are really doing is driving potential buyers away. “The days of curious onlookers attending show days are over. More than 80% of the buyers currently in the market are serious and don’t want to waste time on overpriced homes.”
What sellers need to realise, according to Justus-Ferns, is that the marketing price advertised in the newspapers, pamphlets and on property listing websites is often not the final price a particular home sold for. She says that in the northern suburbs of Johannesburg there is still a 10% – 20% variance between asking price and selling price, despite high demand.
Sellers tend to be emotionally attached to their homes, and so perhaps perceive it to have far more value than it actually does. However, Justus-Ferns points out that sellers need to remember that buyers may not see the same value that they do in the landscaped garden, for example. “Buyers want to compare apples with apples, and it’s the accommodation offerings of a home that are most important to buyers in today’s market. Homes for sale in the same neighbourhood that have similar features and are of comparable size should be similarly priced.”
Buyers these days are remarkably well educated about the property market – more so than ever before – and in order to ensure they are getting a good value-for-money property, they conduct endless research online to shop around and compare properties and their selling prices.
Justus-Ferns notes that currently in the northern suburbs of Johannesburg, well-priced sectional title homes sell within two weeks of coming onto the market. About 90% of the buyers of these properties are investors with a buy-to-let portfolio, with the balance made up of young executives, first time buyers and retirees.
In the freestanding home market which appeals more to families, there is currently a severe shortage of stock which is spurring on demand. “Anything priced under the R2-million mark in the northern Johannesburg area is selling in a relatively short period of time, as long as it is correctly priced,” says Justus-Ferns.
She points out that buyers are not just price sensitive; they are becoming more and more suburb sensitive too. This means that both pricing and buying trends are very suburb dependent.
“While buyers are looking for properties that offer value and that fall within their affordability range, they are ultimately looking for a property that will give them a solid return on investment. Areas such as Douglasdale, Fourways, Ferndale, Rivonia, Morningside and Riverclub are experiencing massive stock shortages. This is because they are highly sought after due to their array of amenities and the solid returns on investment they offer for property owners.”
Justus-Ferns points out that when it comes to affordability levels, buyers are looking for a home they can afford without having to compromise on their lifestyle in any way, including travel and the like.
“That said, the market is turning and for those looking to sell, now is the ideal time. Warmer weather always sees an increase in sales, so be sure to get your home camera ready to attract as many buyers as possible, as first impressions really do count,” Justus-Ferns concludes.
“Buyers Still Determine The Price” was issued by Renprop Residential Resales.