Property 24/10 - 531
26 November 2020 00:00
Freehold vs Sectional Title Homes | Preferred property type among first-time buyers shifts
One of the characteristics of the post-lockdown resilience in the housing market is the strong demand from young and first-time buyers – with the latter, according to ooba, currently comprising 52.4% of residential property purchases for the year to September (2020).
While this would traditionally signal strong demand for sectional title homes - the preferred property type among first-time buyers for the security, low maintenance, lock-up-and-go lifestyle and relative affordability – an interesting trend appears to be emerging, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
“What is becoming evident in this new ‘post-hard lockdown’ environment is that freehold house price inflation has stabilised and is beginning to strengthen marginally, while price growth for sectional title homes continues to slow. For the year to date (Jan - Oct 2020), freehold house price inflation has averaged 2.6%, while sectional title inflation has averaged just 1.8%.
Emerging property trends for 2021 | Low interest rates will continue to drive the market
Industry experts share their insights into trends shaping the property market outlook for the new year ahead.
COVID-19 has accelerated change in the property industry, focusing sharply on safety, socio-economic disparity, and wellness amid a backdrop of global economic uncertainty. A PWC report highlights how the year ahead will be "a crucial moment" to showcase leadership and drive change.
The US report details how the pandemic has accelerated many existing trends like "retail footprint reductions, while it spawned new ones such as an increased focus on social justice and health and wellness, and stopped others in their tracks like the appeal of big cities".
Byron Carlock, PwC Partner and US Real Estate Practice Leader says, “Now, more than ever, the real estate industry has the chance to take the lead in using planning and development skills and investment capital to reshape our work and lifestyle environments. These tools can be used to address societal issues of safety, green space and racial equity. The gauntlet of responsibility is ours to embrace, and industry leaders see the opportunities and are responding with investment and leadership..
POA - What does it mean and why do sellers use it?
When searching for homes on property portals, it is not uncommon for the letters: POA to appear instead of the listing price. Short for Price on Application, the term exists as a way to conceal the asking price from the general public and can be used for a variety of reasons.
According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, an agent might request that the price appear as POA as a way to ensure that only serious buyers contact them. A seller might also request that the asking price not appear because they would prefer for this to remain private and would not want their neighbours, friends or family to know how much their home is worth.
When interested in a property that is listed as POA, Goslett explains that the interested buyer will need to contact the agent to find out more about the home before the listing price will be revealed to the interested party. This can be a tedious process that has the potential to deter buyers.
'Wave of distressed properties expected', sellers advised to price correctly
The market conditions have never been better for buyers - but sellers are at risk of missing out on their key pool of potential buyers if they get their pricing wrong up-front.
“If you want to sell your home quickly in the current competitive market, you have to price correctly for your neighbourhood. The first thing potential buyers look at in their home search is price – and no matter how perfect the house, if the price doesn’t line up with what the home offers and the buyer’s budget, you’ve potentially lost them forever,” says Lloyd Hobson, national sales manager of tech-enabled real estate agency, Leadhome.
'85% of potential buyers seen in first 21 days' Leadhome data shows that in the first 21 days after listing, sellers will access 85% of all the buyers who would potentially be interested in a home. That means sellers will quickly know whether their pricing is on the money.