Stock Shortage drives property prices upwards
Category News
The property market is heating up!
Tyson Properties CEO Chris Tyson today announced that the company has seen a marked improvement in buying activity and that the local market is now experiencing a shortage of stock.
“Seven years after the major slump that saw a devaluation in property prices and developments coming to a halt, the industry is seeing a turnaround,” said Tyson.
“Activity has improved to the point where we find ourselves with few quality properties at market-related prices.”
According to Tyson, South African companies can always look to the overseas market to determine future market changes and if recent international reports are anything to go by, the current acceleration of the market will continue.
In the United States, Bloomberg.com recently reported on a survey that showed that house prices in twenty US cities rose to their highest in more than seven years in October 2013. The report stated that one of the factors contributing to this rise included a restriction in the supply of homes for sale and resulting higher prices.
Figures from the US Commerce Department showed that builders began work on more houses in November 2013 than at any other time in the past five years in a move to keep up with demand. The figures also showed that other parts of the market are rebounding too with purchases of new homes exceeding projections and holding near a five-year high.
Across the pond, the United Kingdom’s Financial Times reports that the UK house price annual growth figures moved into double digits in April for the first time in years. In London, property prices increased by 20% in a three month period while the Daily News reported that estate agents were warning of ‘panic buying’ as a result of a housing shortage.
British agents report that the number of homes coming on to the market has been falling since the beginning of the year. Coupled with the huge demand, the average number of homes sold by an estate agent over the last three months is 23, the highest number in six years.
The Royal Institution of Chartered Surveyors (RICS) attribute the ballooning cost of buying a home to the fact that there are too few homes available to buy and too few new ones being built; and they predict that house prices will rise by six percent every year for the next five years.
“A similar situation is now unfolding in South Africa with some amazing prices being achieved for homes in areas with an established infrastructure, good schools as well as a social and business environment,” said Tyson.
Tyson Property has seen a steady increase in concluded sales in the last four months. In December 56 sales were concluded, while January, February and March saw sales of 96, 105 and 111 respectively.
“In Morningside, agents consistently achieved a selling price within 90% of the listing price, while in April 2014, five sales were signed at the asking price. In addition the average selling price across all our offices is above the KwaZulu-Natal average,” he said.
According to statistics from bond origination firm Betterbond, the average purchase price in the KZN province is R925 000 while Tyson Properties’ average is R1.3 million.
“These figures are a clear indication that the market is picking up quickly and that if ever the time was right to buy and sell property, it is now,” he said.
Tyson advises buyers and sellers to select their agent carefully.
“Choosing the right agent to find your new home is crucial in this type of market. Good agents will often source properties for a buyer in addition to showing them the limited stock on the market,” he concludes.
Tyson Properties has a network of 270 property agents across KwaZulu-Natal working together to fulfill your property needs.
Contact the team today on 031 312 9500 or visit www.tysonprop.co.za. You can also like their Facebook page at www.facebook.com/tysonprop or follow them on Twitter @TysonPropSA.
Author: Tyson Properties
