The hottest market segment at the moment is in the medium to lower value price tag #MumbiWay
An increasing number of residential properties in South Africa are now being sold by auction, and the incidence could rise significantly by year-end.
Sellers and buyers are increasingly aware of the benefits of property auctions, and have embraced the concept. Once the market becomes aware of the advantages of auction, take-off could be substantial, says Lichtenstein.
This is according to Dovi Lichtenstein, on-site residential property auctioneer and agent at Main Street Auctions, a division of The High Street Auction Company.
He says the trend has been underway for some time, but has reached critical mass these last two years. In the last three months, he says 72% of his potential clients have opted to sell their property via the auction method.
“I believe up to a third of homes for sale could come under the auctioneer’s hammer by this time next year,” says Lichtenstein.
“In a housing market like Australia, the vast majority of sales are completed by auction, and judging by local trends it seems we will be playing catch-up.”
Sellers and buyers are increasingly aware of the benefits and have embraced the concept. Once the market becomes aware of the advantages of auction, take-off could be substantial, says Lichtenstein.
He says a key breakthrough was the removal of the old ‘bankrupt estate’ stigma.
“Years ago, the public thought an auction meant the owner had gone bankrupt,” says Lichtenstein.
“That perception is a thing of the past. Today, not all sellers are forced into an auction; they opt for auction because it’s the smart way to go.”
Here are some advantage of buying property at an auctions
- You do not pay the transfer duties.
- Property rates and taxes will be paid by the Bank up until the date of registration. All the arrear amounts will also be covered by the Bank.
- Properties are bought for well below market value. Since the banks want to sell the repossessed properties as soon as possible, you are most likely going to buy a great property for a good price.
- The banks offer you relaxed lending criteria. The banks will be more lenient with some aspects when you are approved for a home loan. This is because the banks need to retrieve most of their money.
There are many advantages when buying a property on auction, and a variety to choose from. What is your opinion regarding these advantages?
According to Lichtenstein, the hottest market segment involves homes with a medium to lower value price tag.
“Over the last two years, attendance at on-site auctions has grown steadily, while the number of registered bidders has also increased,” he says.
“Clearly, the numbers vary across regions, suburbs and price ranges, but the overall impression is the same nationwide; selling your home through auction has become the preferred option for smart, well-informed consumers, and that trend is not going to end any time soon.”
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