The Truth, the Whole Truth and Nothing But the Truth

Private Property South Africa
Property Professional

There appears to be a huge gap between the advertised price and the actual selling prices of property. What’s going on? Spare a thought for sellers when valuing their homes. It can’t be easy for them to get to grips with how much their property is actually worth. First, they have a bevy of agents coming around handing out their expert advice. Then they hear from friends and family experts what they believe the property is worth, and, lastly, the municipality has stuck its proverbial oar in the water, frequently maintaining that the property is worth far more than the seller’s wildest expectations. There’s an e-mail doing the rounds that illustrates this point perfectly: in a nutshell, sellers believe, (quite rightly) that their home is their castle; agents take a slightly less optimistic view and see the home for what it really is. The buyer on the other hand sees all the faults, and the municipality, in its view, sees the property as equivalent to something similar in looks and size to Buckingham Palace. Do buyers and sellers realise the inflated figures displayed in adverts are not necessarily what properties are selling for? Probably not. According to a survey conducted by The South African Property Transfer Guide (SAPTG), Bryanston - an affluent suburb in Gauteng - was one of the highest preforming areas in the country with 127 free-standing properties and 75 sectional title units selling between July and December last year. Of these, the highest price achieved for a house was R11,5 million, the top amount paid for a sectional title unit during the same period being R 5,2 million. Properties advertised on a well-known property group’s website include a high-end, free-standing home at R45 million and a unit for R13 million. The lowest amount that a free-standing property sold for was R600 000, while a sectional title unit went for R320 000. However, according to the website, the cheapest free-standing property available is on the market for R2,43 million and the lowest buyers could hope to pay for a one-bedroom sectional title unit is R499 000. The picture appears to be similar in other areas. Edenvale, a middle-class suburb, attracted 25 free-standing sales, and seven sectional title deals were concluded. Of these, the highest price paid for a freehold property was R1,5 million and the lowest R370 000. The most paid for a sectional title unit was R1,2 million and the lowest price attained was R370 000. The property advertised at the highest price is a three-bedroom home that is selling for R5 million. A three-bedroom sectional title unit is selling for R1,92 million. Prices seem to be more realistic in the lower end of the market. The cheapest home on the website is selling for R950 000 and the most affordable unit, R275 000. In Pretoria there were 35 recorded sales in the upmarket suburb of Faerie Glen. The highest price paid for a free-standing home in the area was R21,8 million. The lowest figure attained in this category was R500 000. A total of 97 sectional title units were sold from July to December last year, the most expensive attracting a price tag of R2,1 million and the cheapest R325 000. The adverts on a well-known property group’s website do not reflect these figures, except in the high-end sector where the most expensive freehold property is listed at R10 million for a six-bedroom, five-bathroom home. The cheapest listing is selling for R730 000. The most expensive sectional title comes in at R3,85 million and the cheapest unit for sale in this area is R515 000. The maxim that advertising does pay is true in most instances. However, one has to question why, in virtually every instance, the properties advertised on property websites are priced far above what the market is willing to pay. The practice of over-valuing appears to be rife in the industry, and should be addressed. Article courtesy of , and is taken from their May/June 2010 Issue.

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