‘Property Prices Distorted’

PROPERTY prices are distorted because potential sellers use comparative methods instead of proper evaluation, Raydon properties said this week.


Speaking with businessdigest on Wednesday Raydon Properties managing director Andrew Chifamba said most residential properties and stands on the market were not priced correctly because sellers were comparing their properties with a similar property in classified sections of newspapers and on the internet which in most cases are “over-priced”.
“A lot of people are using comparative methods the wrong way. For example if one has a five bedroomed house in Marlborough which they want to sell and a similar property in the same area is being advertised in the media for about US$90 000 they then sell their house using those figures,” Chifamba said.
Chifamba said a number of aspects are taken into consideration before a residential property is sold for the “correct price”.
“Sellers who are into this practice are into speculation or inflating prices. Serious sellers do proper evaluation,” Chifamba said.
“(Estate) Agents play a major role in setting right prices. It is their duty to tell potential sellers the truth not what they want to hear,” said Chifamba.
“The classified section and the internet are just guides. Sellers should talk to a number of estate agents and find out the prices of residential properties whose sales were concluded if they are to peg the correct price,” he said.
Chifamba said there where a number of properties that have been on the market for more than five months because they are not priced correctly.
“The most difficult sellers are those who bought or built their houses at inflated prices last year. With the economy stabilising, they will sell their properties for much less than they bought or built them,” said Chifamba.
According to the Construction Industry Federation of Zimbabwe (Cifoz) the cost of building material and labour is said to have declined by an average of 30% when compared to last year. Prices of residential properties are also said to have declined by about 34%.
“The cost of building materials are almost uniform, be it brick, cement or tiles. What differs is the land value. Land attracts greater value than what one puts into it,” Chifamba said.
Chifamba pointed out that if priced correctly, houses in the medium density areas should be between US$40-60 000. Those in the high density are between US$25- 40 000.
“Low density areas are attracting prices between US$65 and US$200 000 depending on the acres, features on the house such as tennis court, borehole, security, swimming pole and whether it is a two or three-storey (building),” said Chifamba.
Sellers who succeeded in selling “overpriced” properties since the beginning of the year targetted desperate buyers.
Chifamba said prices of residential properties will however increase if mortgage facilities are introduced.
“Those at the high end of the market will benefit the most because a lot of people will not qualify for the mortgage loans.
“There is likely going to be a lot of upgrading (on residential properties and areas) by those who will qualify for the mortgage loans,” he said.
Chifamba said buyers should know exactly what they want to avoid paying too much.
“If you see about 20 houses without seeing what you really want, you will end up buying the worst of them all,” Chifamba said.

 

BY PAUL NYAKAZEYA

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