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Johannesburg - Nearly 90% of home sellers are unable to sell their properties at the asking price, reflecting declining
property prices in a high interest rates environment.
Released on Monday, the second quarter FNB Residential Property
Barometer showed 85% of sellers are unable to meet their sales target, up from just over 81% in the first quarter of the year.
"While a bulk of sellers of investment properties are getting prices above what they paid, the percentage of sales at lower than buying price continues to rise," said John Loos, a property strategist at FNB.
During the quarter to June, less than 3% of home sellers got a 30% premium on the property's purchase price, compared with nearly 10% of sellers in quarter to March and more than 10% in the quarter to December last year.
Nearly 10% of buyers earned 20% more on the purchase price during the second quarter, little changed from Q1 2008 and down sharply from more than 30% of sellers that earned the same premium in Q4 2007.
The bulk of sellers in Q2 2008, about 52%, obtained 10% more on the purchase price of their property, down slightly from nearly 60% of sellers who earned the same margin in Q1 2008 and up from 40% of sellers in Q4 2007.
Thirty percent of buyers did not get any return on the sale of their property in Q2 2008, up slightly from just over 20% in Q1 2008 and up markedly from around 10% in Q4 2007.
Some sellers sold at a loss. Although the number is still low, it is rising. In Q2 2008, nearly 10% of sellers sold at less than the purchase price, compared with just over 5% in Q1 2008 and virtually nobody in Q4 2007.
- I-Net Bridge