South African property is experiencing a buyer’s market, but many sellers are not holding out for the cycle to change.
They are still opting to put their homes on the market for a variety of reasons, agents say.
“People sell their properties when they are looking to downscale, upscale, semigrate or emigrate, says Greeff’s Mike Greeff.
“We have seen instances of people downsizing from large family homes to smaller sectional title units because they are empty-nesters and they want the convenience of
being able to lock and go.”
People are selling because “it is all relative”, adds Knight Frank’s Richard Hardie.
“It is a great time to upsize as you will get a much larger property for less in the current market than you will, in say, six months.
“People will always buy and sell. Upsize, downsize, death, divorce, job relocation and so forth.” And even though sellers may get less for their properties in this market, they can also purchase their new properties for less.
There are, however, also signs of increased aspirations among financially pressured sellers to rent their next properties, reveals FNB’s latest Property Insights report.
The estate agents surveyed in the FNB Estate Agent Survey suggest that South Africa’s long economic “slow puncture” is taking its toll on the household sector, says the bank’s property strategist John Loos.
The third quarter estimate for sellers “selling to downscale due to financial pressure” reached 16.3%, the highest percentage since 2013.
The survey also asks agents to estimate the percentage of these financially pressured sellers who intend to “rent down” versus those intending to “buy down”.
“The recent results have been significant, with those believed to be moving into the rental market having risen from 40% as at the first quarter of 2017 to 65.6% of the total as at the third quarter of 2018 survey.
“This reflects a growing caution among this group of sellers, fuelled perhaps by increasing economic and future policy uncertainty over and above rising financial pressure,” Loos says.
He adds that it is possible that the other groups of sellers are also becoming more cautious in uncertain times, and that this rise in rental aspirations among the financially
pressured sellers is to an extent indicative of the trend in the broader seller population.