During the period under review activity was mainly in the residential sector on properties that were below US$100 000.
There was limited activity in commercial and industrial properties.
Activity on the property market was, however, better compared to the second quarter of the year.
According to Kingdom Financial Holding Ltds’ latest market highlight, the slight improvement was due to “acceptance of deed of sale by sellers where a buyer pays a deposit and spreads the balance over a period of time usually six months”.
Investors who made their money in the period 2007-2008 and managed to hold foreign currency in cash are now taking positions after playing a wait and see game with the hope that the property prices will further weaken or there will be better investments options. They are now buying after realising that sellers are resisting reducing prices beyond a certain limit.
This is not to say there are no more bargains but just that variation between asking price and actual agreed price has been reduced by between 20 and 30%.
“Some sellers on the other hand had also hoped prices would improve but are having to be content with the fact that this might not happen and that if they continue procrastinating, prices might further decline forcing them to accept what is on offer,” KFHL said.
In a way, actual prices have temporarily stabilised and the re-correction of the prices has reached a point which is beneficial to both buyers and sellers. However it is important to note that there are sellers who had bought properties for speculative reasons and are under pressure to sell and get foreign currency.
It is these sellers whom a well-informed buyer could bargain with and get a very good deal. To a large extent therefore, the market is still a buyers’ market.
In a show of acceptance that property prices have declined from 2008 levels, listed property companies have revalued their properties downwards by between 10 and 20% in the financial results for the six months ended at 30 June 2009.
This week Seef Properties said the absence of mortgage loans from banks was hampering prospective buyers from purchasing homes.
“Short-term loans being offered by banks and building societies are not practical to a potential home buyer,” said spokesperson John Spicer.
Spicer said the market had, however, been gradually stabilising after a sharp slump last year.
“Since March 2009 when we introduced the multi–currency system of settling bills, indications show an improvement,” he said. Spicer said most estate agents were allowing customers to pay for properties in two to three months but added that most of the transactions were strictly on cash basis.