Selling property is about 'price and proximity'
The importance of seller's realistically pricing their homes is evident in the Stellenbosch property market, says Dorothy Foster of RE/MAX Oaktree, which has serviced the Stellenbosch area for over 12 years.
"Pricing a property at what is perceived to be a fair market value has become one of the single most important aspects to the successful conclusion of a sales transaction," says Foster, "Property that is regarded as overpriced has not fared well with buyers in the area. We have many cash buyers that are looking to invest in Stellenbosch; however they are not prepared to pay more than what they consider to be current market value."
According to Foster most of the properties that have been sold in the area have fallen under the R2 million mark. "There is definitely a strong demand for affordable housing in the area. While a few high-end properties have been sold, the majority of transactions continue to be within the entry-level and mid-range price brackets," she says. "A part from pricing, another aspect that many buyers are looking for is proximity to schools. We have found that several of the buyers are aged between 30 and 45 years old and have families. With schools generally having long waiting lists and children that are zoned for certain schools getting preference, living within a close range has become even more important."
Adrian Goslett, CEO of RE/MAX of Southern Africa says that parents may register their child at any public school, if there is space available at those schools. However, most public schools will have a specific feeder zone. The parent's home address will determine which schools the child is zoned for and these children will be given preference over others living outside of that zone. More and more buyers are choosing to live closer to the school they want their children to attend to ensure acceptance.
Foster says that overall the property market in Stellenbosch has not performed as well this year. She notes that the despite the low interest rates and growth in positive consumer sentiment, sales figures in the first six months of 2012 were 32% lower than the figures recorded for the same period during 2011. "Stellenbosch has a large influx of students each year looking for accommodation and as a result we generally have many buy-to-let investors purchasing property to increase their portfolio for this purpose. This year there have been far fewer buy-to-let investors in the market, with most property sales being homeowners buying a primary residence," says Foster, "This could be due to the fact that many of the sought-after student properties have already been bought. Those investing in student accommodation want property that is on campus or within walking distance. This is because properties situated on the outskirts of this nucleus are struggling to find tenants."
According to Foster, a trend that has developed is that most sales are taking a lot longer from acceptance to transfer. She points out that there are a numbers of varied reasons for this. "One reason is that there are more regulations and requirements that attorneys have to adhere to, such as obtaining tax clearance certificates. However, we have found that attorneys that reside in Stellenbosch seem to be able to speed up the process," she says. "Another trend that we have found is that it appears to be much harder for those who are self employed to gain access to finance from the banks. Those who own their own businesses would benefit from getting all their paperwork up to date before they consider applying for a bond."
While the market in Stellenbosch is currently performing relatively slower than previously, Foster concludes by saying that she is confident that the sales volumes will once again improve due to the unique contributions that the area has to offer.
RE/MAX Press Release