RE/MAX of Southern Africa, South Africa’s largest real-estate group, this week released the results of its South African Property Sales Activity (SAPSA) Barometer with strong indications that the market is in turnaround.
RE/MAX offices in all nine provinces participated in the national survey investigating national property sales activity and the current state of the South African real estate market. Dramatic Increase 92% characterized the increase in property sales activity as dramatic compared to the previous six months. 76% of RE/MAX offices recorded an increase of up to 25% in sales activity, 18% an increase of 26 - 50%, and 6% an increase of 51% and higher.
Most Active Price Brackets
Polled on the most active property price brackets, 34% said sales activity for properties in the R750 000 - R999 999 category was where most movement was recorded. This was followed by properties in the price range of R500 000 - R749 000 at 23%. Homes valued below R500 000 constituted 13% of most active sales, and the same percentage was recorded in the bracket for homes valued between R1 million – R1,5 million.
% Price Drop
When the offices were asked to which percentage sellers can further negotiate down prices of a homes, 50% said between 6 – 10% of a property’s value, 24% said between 11 – 15%, and 16% said 1 – 5% of the value.
Time Taken to Sell
When asked what the average period is for a house on the market before it gets sold, 32% of respondents noted it took up to 3 months, 24 % of all offices recorded a period of four months and 14% said it can take up to six months to sell listed properties.
Reasons for Selling
When polled on why South Africans are selling their homes, 37% of RE/MAX offices reported it was because owners could not afford mortgage payments, 18% of sales were due to owners upscaling to better properties whilst 13% were downscaling.
Current Mindsets
Concerning what best describes the current mindset of South Africans buyers, 76% of offices said sellers want their asking price, and will not reduce it; 24% said they’ll take any price they can get. When the RE/MAX offices were probed on the mindset of sellers – 98% of those RE/MAX offices said that sellers are prepared to negotiate if sufficient factual information has been provided. “Whilst 2009 has been one of the toughest years in South African real estate, RE/MAX has seen exponential sales growth over the last 5 months, with November capping the highest month in sales turnover this year of over R1 Billion,” says Adrian Goslett, Assistant Regional Director, RE/MAX of Southern Africa. ”One of the major factors that has contributed to this notable difference is the increased optimism and positive outlook of the South African public. 2010 will still hold many challenges for the real estate market but with it will come many opportunities for the wise investor. Never has there been a more opportune time to make a long term property investment as right now. Interest rates are at very low levels, banks have eased up somewhat on lending but most importantly the real estate market has readjusted itself in terms of property value.” Goslett said the much anticipated World Cup will be an opportunity to showcase the beauty of South Africa. “Billions will focus their attention on us in 2010. And if we market ourselves correctly as a country, will provide fantastic foreign investment opportunities in the future.”