The need for correct pricing

The recent popularity of the Garden Route and in particular Knysna is having widespread effects on the property and accommodation market. Whilst property owners appear to be in an enviable position when deciding to sell, the most important factor needing careful consideration is the correct pricing of your home.
Currently, because of the rapidly rising prices, and in some cases, Capital Gains Tax, sellers tend to overprice their homes in order to replace them with something much the same in a similar area when they do finally sell. This aggravates the market as the house doesn't sell easily and by the time it does, what is on the market are other overpriced homes. If priced correctly, a home, with the present demand in Knysna, should sell within a month. This would allow the seller to re-invest before the market has moved substantially. As Estate agents, there is certainly not a lack of houses to sell but rather a lack of well priced homes. The inflated prices presently being asked in Knysna only confirm people's suspicions about Knysna being expensive and drive would be investors elsewhere.
The trend for this new buying season is difficult to predict as the Rand has remained strong and foreign investors hoping for a weak rand may still not be inclined to invest. On the other hand because the property market has continued to rise despite the strong Rand, they may buy in case they lose even more ground. Foreign buyers are an important factor as they tend to set the selling prices. Admittedly these prices have been maintained by South African buyers, but some buyers have got to the point where they don't perceive value - thus the current property boom on the North and South Coast of Natal.
The recent decrease in interest rates bodes well for property sales because by and large our buyers are still mostly South Africans.
With regard to tourism and the holiday accommodation market the same rules apply. Twelve months ago, South Africa was very much a safe and a cheap tourist destination. It is still safe, but it is questionable whether we are still perceived to offer the best value. There are other destinations in the world that are now vying for that position, and consequently the pick up in tourism numbers that we experienced last year will possibly not be maintained this coming year, which will have a negative effect on the local tourism industry. My suggestion to homeowners and B&B owners is think very carefully before raising next year's rates. In my opinion, with the strengthening of the rand, accommodation rates should be held constant.
For further information contact LEISURE PROPERTIES at 044 384 0134