An example of one such thing is the propensity on the part of many homeowners to ask unreasonable prices for their property when selling, slowing down the turnover process. Another example is the rising price of electricity which is wreaking havoc on the construction sector of the country.
South African real estate market analysts have found the cause of the massive slow down in the sector – sellers who are demanding unrealistic asking prices. It appears there are a large number of sellers refusing to budge on their asking prices which is causing the market to grind to a halt. Many sellers deny the fact a buyers market has finally arrived. In a buyers market, the buyer has the advantage and can determine asking prices. These unrealistic sellers are determining their asking price on what they would like, not any realistic assessment of what the market will allow. As a result, serious sellers who have researched the region and have accounted for other selling factors like energy efficiency are suffering the consequences of a poor market.
The sellers alone can't be blamed though. Real estate agencies are overvaluing homes in an effort to secure clients, thus creating a vast difference between the asking price and the offers received. This certainly contributes to the overall problem.
In order to turn things around, sellers must consult with industry professionals as well as real estate agencies. Professionals may help sellers determine a realistic asking, and that could give the market the boost it needs to move forward again.
Sellers, though, aren’t the only ones who need a bit of advice in this market. Those wishing to invest could stand to do a bit of research as well. Understanding that South Africa is currently a buyers market and that any reasonable seller is going to be willing to negotiate is the key to success. Many developments have experienced victory by addressing the needs of buyers. For example, those buyers concerned about security have been courted by adaptable developers who are able to carefully address their needs during the buying process.
With other problems looming on the horizon, a market stall could prove seriously damaging. Many developers are now having to wait as along as 6 months for electricity licenses due to the national electricity crisis. This could be bad news for the economy as construction has been the major contributor to the economy's strong growth. If these issues aren't soon dealt with there is a concern that investors will look to other markets. If, however, unreasonable sellers don't completely stall the market, South Africa should once again start to feel the pinch of demand, forestalling any crisis ahead.
