Property: The SELLER’S market is long gone, say experts
Here’s what rising interest rates, slowing sales and lower prices mean for property: the seller’s market is a thing of the past.
The latest trend in Property: The seller’s market seems to be a thing of the past … for now. This is the current sentiment of Samuel Seeff, chairman of the Seeff Property Group, who recently spoke with Business Tech.
Seeff warned property sellers to be more realistic with asking prices due to less buyers, fewer sales and generally lower prices across the board. For property: The seller’s market appears to have passed, for now.
PROPERTY: THE SELLER’S MARKET
The chairman of property group Seeff, noted a 30% to 40% slowing of sales activity compared to the post-COVID-19 boom of 2021 and 2022. And stresses that high interest rates will stick around for the foreseeable future, rendering the seller’s market a thing of the past.
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Seeff says that two years ago the interest rate was low and the market was flooded with buyers. There were not enough properties to cover the demand and they were selling within weeks of listing. Unfortunately, the good times of a seller’s market cannot roll on forever.
THE MARKET HAD TO NORMALISE
“While the market started its downward curve towards normalcy by 2022, the reality is higher-than-expected interest rates put tremendous downward pressure on sales volumes and offers,” confirmed Seeff.
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In property terms in South Africa, the ball appears to be back in the buyer’s court. Buyers are also taking longer to purchase because there is little competition. And they’re unwilling to pay high prices, often making offers well below the asking price.
2023 IS A BUYER’S MARKET
According to the FNB House Price Index, there’s been a declined from 3.5% in 2022 to 0.8% in August 2023. 65% of properties spend three months or longer on the market compared to roughly 30% last year.
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“The upside for the current market is that while we are now largely back to the 2019 pre-pandemic volumes despite the higher interest rate, the bank lending conditions are significantly better. Home loan approval rates, for example, have remained largely unchanged with over 80% of applications being approved. Also, deposit requirements are at their lowest level in a decade – below 10% on average,” concluded Seeff.
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