R2M The "psychological barrier"
Residential property in Cape Town's CBD is still in demand in spite of a generally slower property market - and there is now room for serious price negotiation.
Buyers now have significant leeway in negotiating purchase prices.
Demand here never dries up because people buy into the lifestyle. But properties are taking much longer to sell, which puts pressure on sellers and has opened the way for price negotiation.
Most buyers show resistance to prices over R2m. Take the example of a penthouse in the luxury Perspective apartment block that was marketed at R2,7m but only found a buyer at R1,95m - after eight months in the market.
Properties in the middle range, at prices of more than R2m, are not eliciting much response. At the same time, there are still a few transactions being concluded in the luxury market, where prices can go as high as R20m.
Properties with market-related asking prices now average five months on the market before finding buyers.
Over-priced properties, however, can linger on the market for more than a year.
Most sellers are now willing to award marketing mandates for six months instead of the usual three months.
However, there are still some confused sellers who are out of step with current market conditions. In a recent case we found a buyer for a charming two-bedroom cottage that had been languishing on the market for 19 months. The asking price was R1,95m and the buyer offered R1,7m. The seller, on well-meant advice from a legal source, turned down the offer in the fond belief that the asking price was still attainable.
The rental market is benefiting at the moment, especially in the student accommodation sector.
We had an influx of parents looking for suitable properties to buy in the first few months of the year but most have settled for rented accommodation.
Heather van der Spuy is co-owner of the Chas Everitt International City Bowl office.
Issued by Chas Everitt International
Barry Davies
Chas Everitt International Property Group
Email: bdavies@everitt.co.za
Office: 011 801 2500
Cell: 083 644 0001
Fax: 086 655 5432
Website: www.chaseveritt.com
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