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2011 April 8: ESTABLISHING A REALISTIC MARKET VALUE FOR UPPER BRACKET HOMES IS DIFFICULT IN THE CURRENT MARKET, SAYS ANTON DU PLESSIS

The volatility of the Cape Peninsula property market and the lack of sufficient sales to draw up truly representative figures for the upper bracket market, says Anton du Plessis of Vineyard Estates, makes it very difficult to give definite, realistic valuations on the more expensive homes when these come up for sale.

“The situation,” said du Plessis, “is complicated by the fact that right now many buyers, especially cash buyers, will automatically discount every price no matter how reasonable it is.”

Giving as an example of how difficult it can be to compile conclusive data, du Plessis said that in the last six months only seven transfers of upper bracket (R6 million to R10 million) townhouses took place and of these only three were truly representative of the area.

Of the four that were not representative, one was sold to the government, one (by himself for R8,7 million) had so unique a layout and design that it was in no way typical of this or any other area and one dated back to a sale in March 2010 – there was a long delay to transfer.  Two others were marketed on a plot-and-plan basis and were not typical of second hand homes in their area.

“With so little sales data to work on, it is almost impossible to give an informed valuation – and this situation in Upper Claremont is replicated in Bishopscourt, Upper Constantia and other more affluent southern suburbs areas,” said du Plessis.

Asked if advertisements in the property media might not give a clear indication of the direction in which the market has moved, du Plessis said that the ‘almost incredible’ variety and prices here only adds to the general confusion.

“We often see properties advertised at premiums of up to 30% above their true value.”

In the circumstances, said du Plessis, sellers have to rely to a greater degree than ever before on an experienced agent’s feel for the market and what prices are, in fact, achievable.

“It will come as no surprise that good agents are now taking less cognisance of 2009/2010 prices,” said du Plessis.  “We are in a new market with a new learning curve to be understood.  It will also come as no surprise to long time property trend watchers that less experienced agents are on occasions getting their valuations very wrong, while, among those who get them right most would admit that they had had to rely on intuition as never before – there is simply not sufficient data to do the usual scientific comparative price analyses.”

Du Plessis said that he himself had on his last four sales in 2011, achieved sales of R19,85 million on a total asking price of R21,55 million – an average of 92% of the asking prices.