Recent RPPR (Residential Property Price Ranger) figures indicate that the difference between asking and selling prices has dropped from as high as 20 percent a year or two ago, to just 6 percent in May 2007 and 4.5 percent in April.

Pam Golding Properties’ MD for the Western Cape metro region, Mick Joyce, says this suggests an easing of sellers’ expectations to more realistic levels, and is an indicator of a sound property market.

“The market seems to be adjusting well to new conditions”, says Joyce, “including the somewhat tighter interest rate environment and the overall slowdown from the boom years of earlier in the decade.

Coupled with the steady economic climate of largely positive business and consumer confidence, we believe we are looking at a healthy marketplace with more realistic pricing taking place.

The impact of the National Credit Act will mean that some buyers can no longer afford the homes to which they aspire, but we feel this is healthy in the long run, as it will lead to more realistic buyers who are confident about the prices they can afford, and estate agents who are confident that their buyers are serious purchasers.”

“It is clear from these latest figures,” he goes on, “that sellers’ expectations have adjusted to meet buyers’ expectations, and we are seeing this occurring across all price ranges – yet at the same time it is important to note that there is still sound appreciation in value taking place. The result is a steady flow of stock onto the market.”

Joyce adds that accurately-priced stock always moves faster, whilst over-priced properties can and often do sit on the market for as much as a year and more.

This is a far from satisfactory situation, resulting in properties becoming 'stale' and losing the interest of potential buyers., who cannot be lured back even if the price is later dropped.

“Buyers today are generally well-informed and do their homework,” says Joyce, “and they are consequently aware of properties being over-priced.

The end result is often that such properties simply remain unsold, leaving the seller no option but to either remove it from the marketplace, or accept an offer well below the true value of the home.”


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