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Monday Sep 12, 2011

Property sellers pay the price for aiming high

Newlands, Claremont, Rondebosch and Kenilworth buyers find it hard to accept today's prices, says Tony van der Lith, the new Rawson Properties franchisee for these areas.

"The latest sales by our team have all been for properties in the R2 million to R5m bracket, with one small but attractive apartment selling for R1.1m. Nevertheless, the big demand is for homes priced under R2m.

"We have enquiries every day for homes in the R1.5m to R2m bracket, but there is little stock available in this bracket.

"In the higher price categories, a fairly large number of the sellers still have not adjusted to the new market conditions and insist on holding out for prices that were last obtained two years ago.

"Generally, these are 20 percent or more above today's market levels. We do get offers for these properties, but they can be as much as 30 percent to 40 percent below the list price," he says.

"Those who do price realistically usually have no difficulty in finding a buyer in three to nine weeks. One home, not handled by Rawson Properties, sold in one day."

Van der Lith says buyers who can't find homes at prices they can af ford have two options: lower their sights and buy on the periphery of these highly sought-after precincts, or rent.

If they go for the first option they will find good properties at more affordable prices in Lynfrae, Rosebank and Lower Claremont as well as Harfield Village, which is favoured by upwardly mobile couples.

These areas all have the advantage of being within easy cycling distance of good schools.

If they decide to rent rather than buy in this area, agencies can offer them freestanding houses at just under R10 000 a month - about half of what they would pay on bonds for such properties.

" The standard rent for houses in this area is R8 500 to R9 000 a month, but many of the more luxurious homes go for anything from R12 000 to R18 000 a month."

Van der Lith says his firm has tenants who are renting while saving with a view to buying in five or 10 years from now.

"In the current market, that can make a lot of sense."

Van der Lith's analysis of current conditions was confirmed by the latest figures published by the Institute of Estate Agents' Propstats division.

These show that over the last 12 months, the average house price in upper Claremont was R3.85m and the average sale time 99 days. One home, which Van der Lith says was clearly overpriced, was on the market for 548 days before it sold.

Asked if his comments should be taken to mean that the more expensive homes can no longer find buyers, Van der Lith says his agency can still find a few buyers keen to invest in the area, but in most cases they are also determined to do so at bargain prices.

"As we have very few distressed sellers in our precinct, buyers will have to deal with sellers who, as indicated, are often in no hurry to sell and are able to stick to quite high prices. However, we can often find common ground."

Weekend Argus (Sunday Edition)


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