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WHAT YOU NEED TO KNOW ABOUT A BUYER’S vs  A SELLER’S MARKET!

These cycles of a property market are always either skewed in favour of the seller or the buyer.
Property gurus claim that making money out of property is all about  “when you get in and when you get out. “ At present, the property market is in a ‘general recovery phase ‘ from a very entrenched buyers market which has dominated the South African Property Market for the past 7 years.

The typical features of a ‘buyer’s market’ are :
> an increase in the number of properties being listed  and an increase in the urgency of many of those sellers to sell. The property market tends to become saturated with properties for sale and properties can remain on the market for extended periods without selling.
> a decrease in the number of buyers in the market which reduces the competition in the market- place  resulting  in  a lowering of listing prices and a tendency for properties to sell below the listing price.
> If you are a buyer, you need to take advantage of the buyer market scenario…even though it may appear to you that no-one is buying! You are right..not many people are buying and that is why this is your best chance at getting a property for a reduced price and thereby see a good and quick escalation in the value of that property ,once the market recovers.
> If you are a seller, you need to take these set of circumstances very seriously – because you cannot beat them. To over-price in  a buyers market, is like trying to win a race with your legs tied together! Your over-priced property  will merely help the other comparable and more keenly priced properties, to sell as it will make the other properties look like excellent value for money! You need to be prepared to negotiate in this kind of market, knowing that a sale now at a reduced price, is better than no sale at all. Most of all you want to avoid your property being on the market for a long period of time. The danger is that it will become shop-soiled and stale, it will be avoided by buyers and agents and even when you slash the price in order to achieve the sale you now so desperately need, it will not sell.
In a buyers market, If you don’t need to sell , don’t sell.

The typical feature of a ‘seller’s market’ are :
> a scarcity of properties being listed due to the perception that property is a very valuable investment and one should hold on to it
> an increased number of buyers in the market place who are very keen to invest in property. This increases the competition  in the market place and drives prices up
> if you are a buyer in a seller’s market be aware that it is not necessarily the right market to be buying in. Property moves in cycles and a downturn will follow…so if you buy at the peak of the seller’s market,  be prepared to hold on to the property for a good period of time before the property regains value.
> if you are a seller in a seller’s market, the world is your oyster! Your need to negotiate your price [providing it is market-related and that the property is ‘marketable’] is reduced as there will be a fair amount of interest in the property from numerous buyers and fewer options for them to choose from. The challenge for you is estimating how long this seller market cycle is going to last for and to judge accurately when the market is peaking..and when to sell.!

In 2014 in Cape St Francis , the property market is in a ‘general recovery phase ‘ from a very entrenched buyers market which has dominated the South African Property Market for the past 7 years.  The recovery is tentative and not in full swing yet and could be seen to wobble a bit should bond interest rates rise significantly.
BOND FINANCE : Some banks have lightened the burdensome restrictions placed on acquiring finance this being mainly in the area of reducing the deposit requirement for buyers. Banks still favour lending finance on developed property as opposed to undeveloped property. Self-employment and an age over 50 are still very significant  obstacles to acquiring finance.
DEVELOPED PROPERTIES : A shortage of this kind of stock has always been a feature of the Cape St Francis property market although this was relatively reduced during the buyer’s market in the past 7 years. CSF has never been a very speculative kind of market and buying developed property here is often the realization of a dream or long-term goal for the buyer hence a reluctance to sell. Due to the lack of choice in this market and the fact that many homes are old, fisherman-type residences, a buyer should be encouraged to go for location first and to accept that in most cases alterations and improvements will need to be done.
UNDEVELOPED PROPERTY :
In 2014 developed properties remain in more demand than undeveloped property, a factor which is largely due to the high costs of building and the perception that it is difficult to build when one is not resident in the area . While it is accepted that building costs are high and can spiral during the project, the supply of accomplished builders and the access to competitively priced building supplies must be stressed. Building your own property can also be a sensible route to go to avoid having to pay for costly renovations.