With the interest rate at an all-time low – and expected to stay in the low single-digits for some time to come – South Africans are making the most of the opportunity to gain a foothold into the residential property market, or to invest in larger properties.
The thriving market is driven by two key factors:
- The market is strong. People are buying a lot of property, so we’re seeing a lot of volume.
- The property market is always affected by supply vs. demand, and right now Leadhome has lots of clients able to invest into property as a result of the low interest rate.
What this means is that properties are currently selling for less than their anticipated price as sellers scramble to secure sales. It really is a buyers’ market right now and we expect to see this continue well into 2021.
As an example of how strong current buying power is, let’s look at Sandton. In 2020, the area saw 33% of sellers, mainly in the suburbs of Bryanston, Paulshof, Sunninghill and Douglasdale, needing to reduce their asking price before receiving any offers. They also accepted offers of around 95% of their original asking price.
One of the key indicators that we look at to assess the attractiveness of selling a property at any given time is the ratio of buyer enquiries we receive compared to the number of properties we’re marketing on behalf of sellers (measured over a rolling 7-day period). Simply: the higher the ratio, the more buyer interest there is.
Our statistics show that, when ‘hard’ lockdown ended on 1 June 2020, buyer interest skyrocketed. The average was 90% buyer enquiries to marketed properties, compared to 62% in 2019. This means that every property on our books received 0.9 buyer enquiries every seven days, compared to the average of 0.6 buyer enquiries in 2019.
At Leadhome, we’re perfectly poised to help buyers, sellers and agents benefit from this upswing in the market. Our proprietary software gives agents the edge when it comes to pricing properties correctly and, because we’ve automated most of the admin, our agents are able to do what they’re passionate about: sell more properties, faster.
Going back to our Sandton case study, our ability to help agents price properties correctly – not only in terms of their physical value, but also in terms of the prevailing market – ensures that properties sell faster. 33% faster, to be exact.
This speed, combined with our low, fixed-fee commission model ensures that sellers also get more out of a deal. In fact, our value proposition for potential sellers is extremely clear and competitive. Our fee is 45% cheaper (on average) and 85% of properties sell at the listing price.
More good news is that we’re growing our presence in key areas. We started 2021 with 65 agents and an aggressive recruitment drive to build this to 200 agents across the country by the end of the year. Great news, especially for buyers and sellers in Bedfordview and Edenvale, is that 12 agents, with over 100 years of real estate experience between them, have joined our stable along with their support staff.