How Expensive is That Dream Holiday Home – Really?

Private Property South Africa
Property Professional

There appears to be a huge gap between what homeowners expect to receive and what buyers are willing to pay for KwaZulu-Natal homes. * How difficult an exercise is it to value your average KZN home? Agents usually bear the brunt of the seller’s wrath when a property they have listed fails to attract the right buyers or, in the worst-case scenario, any buyers at all. Are agents to blame, or do sellers have unrealistic expectations based on what they see or hear from neighbours and other so-called experts? Many sellers labour under the misapprehension that because other homes are listed at particular prices, theirs is going to sell for that price. Home ownership brings a number of emotions to the fore. This stands to reason because, generally speaking, selling a home is an emotional decision. Hearing that their neighbour’s home is on the market at a higher price is incomprehensible to many: their house is, of course, bigger, better and has more amenities as well as sentimental value and is, therefore, worth far more. Of course, sellers are never going to admit they sold for far less than they anticipated, and this silence just feeds the pricing frenzy. Sales in the Durban area in 2009 indicate that the picture on the ground is very different from the pie in the sky dreams of sellers. According to statistics released by The South African Property Transfer Guide, there were only eight sales of free-standing homes in Umhlanga Rocks from July 2009 to December 2009. The lowest price achieved was R1,4 million and the highest price paid for a home in this affluent suburb was R7,105 million. The sectional title side of the market performed much better and 95 units were sold in the same time period. These ranged in price from R750 000 to R9, 8-million. The cheapest property advertised on a well-known property website, is a sectional title unit at R850 000 for a one-bedroom apartment. The most expensive listing is priced at R22,5 million for a three-bedroom apartment. The house with the lowest asking price is R1,7 million for a three-bedroom home with ‘limited sea views’. On the other side of the coin, the highest asking price on the website is R15 million for a five-bedroom home. Research on middle-class suburbs in the Durban area indicates that full-title properties in Hillcrest were popular with buyers. A total of 75 free-standing homes sold during this period, ranging in price from R342 000 to R4,6 million. Sectional title sales were lower in this area with only 11 sales taking place. Prices achieved ranged from R685 000 to R2,6 million. Once again the prices of advertised properties do not reflect the actual selling prices. The highest freestanding property listed is priced at R8,9 million and the lowest R1,05 million. Sectional title units range in price from R22 million for a unit on an equestrian estate to R765 000 for a two-bedroom apartment. The picture in Brighton Beach, another middle-class suburb in the region, is slightly different with 34 free-standing homes selling for prices ranging from R430 000 to R2,1 million. The sectional title segment of the market saw 21 sales varying from R380 000 to R1,245 million. The property prices for free-standing properties advertised in this area do not reflect what is actually happening in the market place. The most expensive listing is R4,9 million for a nine-bedroom home. The cheapest free-standing property is R650 000 for an extremely run-down house. On the sectional title front, properties appear to be more realistically priced and a one-bedroom apartment is selling for R245 000, while a three-bedroom duplex is on the market for R1,1 million. Any agent worth his or her salt uses a comparative market analysis (CMA) to value a property. Perhaps the time has come to move away from sellers who refuse to listen to common sense and for agents to focus on the most important aspect of their jobs: marketing properties that actually stand a chance of being sold. *Article courtesy of and is taken from their May/June 2010 Issue.

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