General sales enquiries back to pre-lockdown levels and transactions continuing in the virtual space.
While South Africa still has some way to go before most lockdown regulations are lifted, encouragingly, as far as the residential property market is concerned, we are continuing to see some activity, with general sales enquiries back to pre-lockdown levels and transactions continuing in the virtual space, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
“Although Covid-19 and the ongoing lockdown has had a significant impact on the housing market, against the backdrop of an economy which was already in a recession and an already-subdued property market, we are finding that the rapid adoption of new technology and ramp-up of our digital capabilities is delivering results and enabling the groundwork to be laid for the final conclusion of transactions as soon as the Deeds Offices around the country are fully operational.”
Dr Golding says bolstered by the 225bps interest rate cuts to date this year (2020), with economist predictions that it may reduce by a further 125bps, serious buyers are shopping – actively viewing listings online and engaging with agents, taking comfort in knowing that there is a specialist agent at the other end of the phone or WhatsApp call or Zoom meeting, talking them through the videos or photographs and sharing area and market-related information. “Another innovation, which is quickly catching on and well received by the marketplace, is that we’ve also introduced the Pam Golding Properties iShow offering, which enables us to showcase our properties online via video viewings and virtual show days using Facebook Watch Party functionality.
“Consequently, with the aid of modern technology – utilising digital capabilities and communications across various platforms, we are seeing savvy sellers and buyers using available time wisely to research the marketplace and consult with our agents to ensure that their properties are pegged at realistic, market-related prices in the current market, or to thoroughly research the market browsing neighbourhoods and properties for sale in order to move forward with purchase decisions as soon as they are able to physically view their preferred selections.
Correct pricing more critical than ever
“As the lockdown regulations are gradually lifted, we are already seeing an increase in requests for valuations from homeowners looking at selling for a variety of reasons. Being currently a buyers’ market, correctly pricing a property for sale is key, especially as more stock becomes available to choose from. As a result, it is even more imperative that sellers engage with experienced agents as to the correct price in the current economic environment.
Explains Dr Golding: “We have statistically determined that the more accurately your property is priced in terms of its market value when it is first listed – within the sweet spot where serious buyers are making offers – the quicker it will likely sell and the higher the selling price will be.
“Detailed analysis has shown that pricing too high, with the intention of reducing the price at a later stage, undermines the property’s ‘reputation’ with buyers and ultimately negatively affects the final selling price. It also follows that the more price adjustments that are required to bring the price into line with what the market is prepared to pay, the longer the property takes to sell and the lower the price finally achieved.
“Apart from comparing your home not only with previous sales in the area, it is important to compare it with stock that is currently on the market in that particular area. Consequently, the key is to ensure that your home stands out by being competitively priced and presenting well.
“This is where advice from a reputable, experienced agent with a sound knowledge of the area is invaluable. Sellers are advised to bear in mind the need to remain flexible as trading conditions unfold and may change, as we are currently in unique times resulting in a ‘fluid’ market.
“Banks still have an appetite for lending, but we are seeing a lot more cash buyers entering the market at present, making it imperative that your product comes onto the market at the correct price.”
Dr Golding adds: “As far as where the market will be post this crisis is difficult to predict, but the hope is that there will be pent-up demand from transactions that were already in progress as well as from savvy buyers capitalising on low interest rates and value-for-money property acquisitions. It is also probable that there will be financial distress post-lockdown and this could give rise to a variety of situations including the repricing of certain markets, altered supply and demand scenarios in different areas and suburbs around the country and added to this the likelihood of a completely different way of viewing properties and transacting online.
“For sellers, it’s an ideal time for home maintenance, garden upkeep and decluttering which greatly improves the aesthetic appeal of your property. As far as is possible, spruce up your house to ensure it is looking at its best once the lockdown is over. By using this time to improve the presentation of your property, when lockdown is over, your home is beautifully presentable to the buyer pool.”
Buyers are also advised to be focused and not to take a scattered approach to area and type of property. Concludes Dr Golding: “Deal with an area specialist and fine tune your requirements so that the agent can guide you to the right property in the right location to suit your needs, including lifestyle and budget.”