Politics and economy set to boost property auctions
Predicted neutral interest rates with no serious fluctuations and an improved political environment with the appointment of Cyril Ramaphosa as president of the ANC, are expected to attract property investors and bargain hunters to increase their fixed asset portfolios hunting for bargains on auction.
Pieter Geldenhuys, CEO of Bidders Choice, says he expects the call by economists, for people to pay off their debts and the current disruptive world economy, including local political and economic turmoil, will compel debtors to sell properties under market value.
He believes these market conditions are ideal for property owners to sell properties on auction because the process is swift and transparent. Property auctions are also the perfect platform for investors who want to find bargain properties.
“The latest residential property trend of property owners downsizing and buying smaller lock-up–and-go properties to reduce debt and improve their lifestyles and security, caused an oversupply of expensive residential property. The result is decreased property value and insufficient demand, which offers the opportunity for investors and bargain hunters to buy larger and more expensive properties at lower prices on property auctions,” he explains.
In addition, there is also an oversupply of business properties, such as offices, due to the new business trend of companies offering flexible working hours, using open plan offices and allowing staff to work in mobile offices. This trend led to an oversupply of office space due to lower demand.
Geldenhuys believes these trends will continue well into 2018. “Sellers who are under pressure to sell for various reasons will probably be unable to sell at true market value. However, selling these properties on auction at least gives them a better price than any other sales platform.”
Auctions offer better prices because buyers are under more pressure to buy when more than one bidder bids on the same property at the same time. Property auctions are also becoming a convenient and fast process preferred by buyers and sellers in the modern, digital and fast-paced economy.
“However, I think we should watch political and economic developments closely in the first quarter of 2018, before we make too many predictions.”