Peter Gilmour, Chairman of RE/MAX of Southern Africa, takes a look at recent trends in asking prices set by sellers in the global property market and concludes that getting the pricing right is becoming an art that demands extensive experience and expertise…
In South Africa, estate agents participating in the most recent FNB Estate Agent Survey revealed that the percentage of sellers having to drop their asking prices remained unchanged from the previous quarter at 81%, with the average price drop estimated at -12%. “This indicates that many sellers in South Africa are still hoping to obtain unrealistic prices given the current state of the market,” says Peter Gilmour, Chairman of RE/MAX of Southern Africa.
“The consequences of unrealistic pricing are clearly reflected in the average time properties remain on the market - 15 weeks and 4 days. Realistic asking prices are those that are in line with the current market, and such pricing brings the average time a property is on the market down to eight weeks or less.” Gilmour notes that this trend in which sellers are forced to drop their asking prices to make a sale is not a South African phenomenon. “Sellers in property markets across the globe are facing similar challenges, and although the exact percentages vary from one market to another, the trend of reducing asking prices is a global one.” In the UK, it has been widely reported in the media that home owners in the UK are forced to accept offers of 10% below the asking price to sell their properties.
On the other side of the globe, data released by the Real Estate Institute of Western Australia reveals that 67% of sellers in Perth are prepared to drop the asking price by an average 6% to get a sale, as the average paid for a property in the city has slumped. The average time required to sell a property in Perth today is 63 days.