The property market in Swaziland continues to show growth and opportunity for potential homebuyers, says Lyle Hutton, Broker/Owner of RE/MAX Real Estate Specialist, located in Ezulwini, Kingdom of Swaziland. However, he points out that there are several factors that could have an impact on the market and investment decisions in 2014.
“One factor that is currently having a massive influence on the property market in Swaziland is that asking prices are often overly inflated, making them unsustainable as many people simply can’t afford to purchase homes at their current valuated prices. The result of overpricing is that we are often unable to sell properties at the initial asking price, which the seller perceives to be the true value of the property. It is important for sellers to remember that it is often not the agent or the seller who determines what a property is worth, but rather the current market conditions and what buyers are prepared to pay for property in that market,” says Hutton. “Property may be valued at a certain amount by valuators, but that does not necessarily mean that it is the price which properties are currently achieving in the market. In the Swazi market, there needs to be a smaller gap between estimated value and actual prices paid for property.”
He advises that sellers be selective when asking valuators to assess their property and says that they must ensure that the person they use is a qualified professional with the credentials to accurately calculate the value of the property based on its market value. “Currently the variables in terms of pricing are highly inconsistent. While sellers may think that a higher evaluation is beneficial, it could only hurt their chances of achieving a good price in the long run,” says Hutton.
Adrian Goslett, CEO of RE/MAX of Southern Africa, says that overpricing is one of the most detrimental mistakes that homeowners can make. He notes that often sellers set a higher price for their property than what they want to get out, with the hope that if a buyer offers a lower price, they are still able to negotiate close to the original price they wanted. However, he says that in reality, if the property is overpriced, many buyers won’t even take the time to view it and would rather look at other properties that are priced at what they deem to be reasonable market value.
Statistics show that if a property is priced correctly it will be sold within the first four weeks of being on the market and generally it will sell at very close to the asking price. Recent research has found that homes which remained on the market for five to 12 weeks sold for 3% less the asking price, while those that sold after being on the market for 13 to 24 weeks sold for 6% less. Houses that were on the market for 24 weeks or more sold for more than 10% less than the asking price.
Hutton says that property prices in South Africa are at least 30% lower than what similar houses in Swaziland would be priced at. “Essentially what this means is that if a South African, middle working-class family should want to relocate to Swaziland, they would not be able to afford to buy a similar house for the price they sold their property for in South Africa.”
According to Hutton, another element that will have an influence over the market is the fact that more and more new developments have been built, which has resulted in an oversupply of residential options. “This is excellent for potential homebuyers and investors in that they are spoilt for choice when it comes to investment opportunities. However, this will place more pressure on sellers to ensure that their property is priced correctly or they will run the risk of watching the market from the side-lines,” says Hutton. “The oversupply of developments has led to a drop in demand for standard residential plots and housing. A price correction in the market could stimulate demand and could perhaps entice further foreign investment.”
Hutton says that the high municipal rates levied in the urban areas of Swaziland have contributed to the trend of more and more people moving out of the cities and building property on Swazi nation land. The problem with this trend is that the land does not hold a title deed, which means that homeowners are unable to use their property as collateral to access bank loans or mortgages from financial intuitions.
He notes that another cause for concern in certain areas is the building quality of some of the properties being built. “It is crucial that property owners understand that building a house is a big investment and, as such, they should protect that investment by ensuring that they hire qualified builders or contractors. This will ensure that the value of the house is not diluted due to poor workmanship,” says Hutton. “Quality control of new property construction and fair market related pricing will assist the Swaziland property market to grow and continue to show improvement,” he concludes.
Article from: www.remax.co.za
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