Real Estate Market Trading At Lowest Mark

Estate agents have described trading in the real estate market as very bad, citing too many new entrants.

The sentiments were expressed in the quarterly survey carried out by First National Bank (FNB) Namibia, in which they were asked to rate the trading environment on a scale of 1 to 10, where 1 is very inactive and 10 is very active. The agents gave an average score of 2.3 out of 10. “Therefore, based on estate agents’ sentiments the trading environment continued to deteriorate. Some of the reasons quoted were that more and more estate agents enter the market. About 79 percent of the respondents rated the trading environment as very inactive and gave the lowest possible score of 1. This is also the lowest activity score for the past two years,” said Thomas Slabbert, head of home loans at FNB Namibia.

FNB conducts surveys on a quarterly basis among estate agents to gauge their insights on the local real estate market. The survey relates to estate agents’ personal experience of market conditions for the quarter. According to the survey properties spent an average 90 days on the market, which is considered quite long, taking into account that it is an undersupplied market. However, pricing seems to have improved, since 92 percent of the properties sold within 10 percent of the original asking price.

“The few stubborn sellers who continued to over-price their properties found that their properties took 275 days longer to sell than the market average. Sellers in general are becoming more flexible on price, with properties selling on average 5 percent below the asking price and for the second consecutive quarter, house prices have traded below the original asking price. This shows that sellers are beginning to lose their price leverage in the market or alternatively buyers can now negotiate prices downwards a bit more aggressively as foreign investors begin to search for more lucrative property markets elsewhere, due to the improved global house prices,” said Slabbert.

Source : New Era