It now takes more than 10 weeks to sell residential property in South Africa, according to the FNB Property Barometer November 2020.
This has come down from 13 weeks and 4 days in Q1 2020, and 16 weeks in Q3 2019. FNB says this improvement is across the board, particularly for properties priced up to R1.8 million.
Property owners wishing to sell in the current market should price their properties right, and in line with the market.
Correctly priced properties are sold within days in some cases, according to agents.
However, they note that at the upper-end of the market, properties are still taking a bit longer to sell. To attract the right buyer, sellers should price right from the start, and get help from experienced area specialists.
For properties that sell, discounts haven’t been as big as initially feared, but sellers are now willing to negotiate.
Time it takes to sell
According Dr Andrew Golding, CE of the Pam Golding Property group it takes nearly 8-10 weeks to sell correctly priced properties.
“Well-priced properties below R3 million and located in sought-after locations can sell in a day, and others within 8-10 weeks.”
RE/MAX All Stars in Gauteng says it takes on average three months to sell property in Alberton and Germiston areas. “Properties below R1.5 million spend less time on the market to a few days,” says Luc Delys, Team Leader of Team Blade.
From 1 January to 6 November 2020, it took 147 days (21 weeks) to sell property in the Atlantic Seaboard. This is the average for freehold and sectional title properties, according to Propstats data.
RE/MAX Living reports an average over the same period of 120 days (17 weeks) within the Atlantic Seaboard.
“In 2019, the industry average over the same period was 122 days for the area. Properties priced over R6 million take longer to sell,” says Susan Watts, Broker/Owner of RE/MAX Living in Cape Town.
Average days on the market during the same period in 2019, for high-end properties is approximately 188 days (almost 27 weeks).
Importance of right pricing
Buyers are currently spoilt for choice due to available stock on the market, says Watts. Some offer far less than the asking price hence many properties take longer to sell.
“My advice to sellers is to consider all offers very seriously. In the last six months, good offers were turned down, and those sellers are now willing to accept lower offers,” says Watts.
Read also: Top five tips for selling property
Time on the market is determined by demand strength relative to supply, and realistic pricing, says Dr Golding. “The ongoing adjustment in prices (recently in the Western Cape) contributes to the decline in time on the market.
Discounts on asking prices
FNB data shows that improved affordability has enabled sellers to be more willing to negotiate. The average discount from the listing price fell to 11% in Q3 2020 from 13% in the first quarter.
“Discounts result from the increased activity in the middle segment. The high-end of the market offered bigger discounts,” says Siphamandla Mkhwanazi, FNB senior economist.
He says mortgage payment holidays prevented a major supply impulse due to the pandemic-induced income squeeze. As a result, price reductions have not been as large as initially feared, underpinning resistance in house prices.
Delys says this is the trend that banks are seeing on average. Certain factors such as sellers insisting on a certain price that unfortunately the market cannot hold contribute to price difference. Factors such as area market trends contribute to price discounts.
“We believe a 5% variation is a fair and more realistic difference between listing and selling price in our areas.”
Dr Golding says they are still achieving prices which are close to listing prices, on average 92% and upwards.
Between June-September properties listed below R6 million on the Atlantic Seaboard dropped their asking price by 14.4% on average. Properties over R6 million reduced asking prices by an average of 19.8%, says Watts.
“In the City Bowl, properties below R6 million dropped their asking price by an average of 13.6%. Those properties above R6 million reduced their asking price by an average of 19.1%,” adds Watts.
