Property analysts said most residential properties and stands on the market were not priced correctly because sellers were comparing their properties with similar ones in classified sections of newspapers or on the internet which in most cases were not correctly priced.
A comparative method is when one has a five-bedroomed house in Avondale which they want to sell while a similar property in the same area is being advertised in the media for about US$90 000 then sell their house using the same figures.
Property analyst Andrew Chifamba said such sellers were speculators who inflated eventual prices. Bona fide estate agents do proper evaluation.
Property analysts said a number of aspects are taken into consideration before a residential property is sold for the correct price.
“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 were a number of properties that have been on the market for more than five months because they were not priced correctly.
“The most difficult sellers are those who bought or built their houses at inflated prices in or before 2008. With the economy stabilising, they will sell their properties for much less than
they bought or built them,” said Chifamba.
Meanwhile listed property counters proved to be a durable investment in a recession, judging by their performance in January when compared to other sectors.
Four of the seven properties-linked listed companies which traditionally have been favourites for long-term investors achieved an “attractive performance” showing the benefits of increased scale which allowed them to be in the same league as blue-chip counters such as Econet, Innscor, Delta or Meikles Africa.
Dawn properties share price rose by 31% to 1,7c from 1,3c. Murray and Roberts was up 26% from 17,5c to 22c. Willdale moved from 0,25c to 0,31c a 24% increase. Larfarge rose 5% to US$1,10 from US$1,15.
Three counters however were in the red during the period under review with Pearl Properties going down by 13% to 2,6c from 3c, Mashonaland Holdings eased by 11% from 1,8c to 1,6c. Pretoria Portland Cement Company was down 7% from US$2,75 to US$2,55.
“Property counters performed well across the board when compared to other sectors. While margins are likely to remain under pressure their order books have remained healthy and there are plenty of large-scale projects as the construction industry is improving,” an analysts said on Wednesday.
While a growing number of pundits have all but declared the property market healed, the latest evidence on the stock market and distortions in housing prices paint a different picture.
The downward correction in property prices since dollarisation has in fact enhanced affordability, making it possible for more buyers to participate in the market. The reduction in costs is not the only aspect contributing to a buyer’s market; the increased availability of homes for sale at estate agents and in classified section of newspapers is also giving homebuyers further options.
Market analysts however said as long as liquidity does not improve, the property market was likely to remain generally subdued during the remainder of the year.