HomeBusiness DigestTo sell or not to sell

To sell or not to sell

Property – By Patrick Kennan

I GET at least one call a day from a friend or client asking me the same question. Should I sell my property? Is now the time?

na, Arial, Helvetica, sans-serif”>We all know that prices are down but will they recover or will the downward trend continue.

My answer is always the same – I don’t know. To borrow the words from a famous gold analyst when asked where the gold price would go – ” the market may go up or down not necessarily in that order”

In 12 months’ time the answer will be obvious and we all will be kicking ourselves around the block that we didn’t make the correct decision to make a killing or avoid a loss.

There are arguments to support property prices falling (in fact plummeting) and there are as many and equally convincing arguments supporting stability and growth.

Those in favour of a fall in the market predict a continuing deterioration of the social, economic, political and security situation in the country with the private school crisis being on top of the pile as the current single most unsettling factor.

This basket of woes will force a further exodus of property owners from the country with a resultant flood of properties on to a market, which is already weighted in favour of the buyer.

One must not forget that only 18 months ago property prices were half of what they are today in real terms and before that were even lower. There is no reason why they should not go down there again.

Those in favour of an increase in property prices accept that they will have to be very patient but point to the following:

The current crisis in which the country finds itself will be resolved one way or the other some time;

Prices in the region generally are considerably higher than those in Zimbabwe;

While it is a buyers market there is not actually a surplus of property. There are not hundreds of empty houses lying about. Once the current over supply is mopped up there will be a shortage again; and

Replacement values of properties currently exceeds market values by a considerable margin and building costs are not likely to decrease. With the demise of so many of the local manufacturers of building supplies and the exodus of expertise, so much more of the cost of construction now needs to be imported.

Those are some of the arguments.

There are many more I am sure to confuse one further. In my opinion the answer is not obvious and it is anyone’s guess. Good luck when making your decision and here is hoping that time proves you to be correct.

Patrick Kennan is an international property consultant.

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