Auction has traditionally been the favoured avenue by which to acquire or dis-invest in high end commercial or premium residential properties. The month of August however has seen a definite increase in first time and entry level purchasers acquiring their property via the auction mechanism, according to ClareMart Auction Group CEO, Jonathan Smiedt.
“An entry level property can be described as falling within R500, 000 to R1.5million mark. Our Group has recorded several such properties being sold within the month of August which have reached a comfortable total value of approximately R15million” says Smiedt.
Smiedt believes that there are various factors which have resulted in this noted increase and these are namely the recent drop in the interest rate as well as growing buyer confidence and education in the auction mechanism.
“The drop in the interest rate by South African Reserve Bank Governor, Gill Marcus, has led to an increase in buyer confidence and ability particularly that of the first time or entry level buyer” says Smiedt. Banks, due to the global recession have in recent years had less desire to allow borrowed spending. This lending policy by the banks has been relaxed in light of the interest rate drop. “Those purchasers who were originally put off by the more stringent lending policies or were unable to attain finance due to the previous rate are now in a position where that small investment property or first home is affordable”.
Secondly, the nature of the properties sold which include a bachelor flat on Clifton’s Victoria Road as well as family homes in Kirstenhoff, Athlone and Strand North, all present a single common factor. “All of these properties offered excellent value as sales and purchases. These properties were sold in accordance to their current market value which allows for both satisfaction by the seller as well as purchaser”. Smiedt believes that this is a direct result of education in the property market and more so in the auction mechanism.
“More buyers and sellers are beginning to understand the real terms of value regarding property. This creates an opportunity for both parties to find a favourable middle ground”. Smiedt also maintains that auction itself has been better marketed and facilitated in recent times and this has created a growing buyer confidence in the mechanism. “Auctioneers are ever communicating that the auction platform is not just for big business and the proverbial high rollers. It is also a medium that can appeal to the buyer who is new to the market and may only be interested in smaller investment purchases or acquisitions”.
For information regarding available properties and up-coming auctions contact the ClareMart Auction Group on 021 425 8822 or visit www.claremart.co.za