Not All Doom and Gloom

There has been much debate centred around the persistent slump in the property market, with a range of experts going from one extreme to the next, some predicting that house prices will continue to drop, while others saying that the situation is merely a stagnation and not as bad as many make it out to be.

Whatever the case, the fact remains that sellers are having to settle for much less than asking price, with buyers able to literally shop around for the best deal. An article in the Weekend Post indicates that homeowners in the Cape are having to settle for up to 30% less on their homes, while 90% of sellers in Port Elizabeth are having to accept offers lower than asking price. The national average lies at 83%, according to FNB's property barometer.

Considering that the market is literally saturated at the moment, it's reasonable to assume that banks would be more inclined to help homeowners than repossess properties. South Africa is not the only country experiencing these difficulties. An inspection of the property markets in Australia and New Zealand will show much of the same pressures being felt by homeowners.

If you are selling your home then it's vital that it is priced realistically if you are to achieve a successful sale. Buyers are essentially controlling the current market, as they are putting in offers well below the asking price and walking away if the deal doesn't suit them financially. Those who aren't experiencing the pinch so acutely would do well to take advantage of the current market, as buyers are really spoilt for choice and bound to pick up a bargain. It's important to remember that property cycles are just that, what goes down must come up and vice versa.

Much of the information contained herein is courtesy of Melody Brandon ("Desperate times as house prices plummet", Weekend Post, 12 July 2008).

If you would like to buy or sell property in Cape Town's False Bay area, please visit www.coastalrealestate.co.za or www.falsebayproperty.co.za.