The influence of current buyers' behaviour on the property market
Category Home Buying/Selling Tips
It goes without saying that the dynamics of the property market go hand in hand with the behaviours and decisions of buyers. Understanding these behaviours, the internal and external factors that influence them, and what their living situation requires is vital for all stakeholders, from developers to investors.
To further understand these factors that influence decision-making, we explore the current landscape of the property market through the lens of buyer behaviour, examining key factors that shape market trends.
Current market, stock vs. the number of buyers
The property market is a delicate balance between supply and demand. Currently, real estate experts observe a disparity between available stock and the number of active buyers. The number of buyers remains relatively stable despite a steady influx of properties for sale, driven by various factors such as new developments and existing home sales. This imbalance can impact pricing dynamics and ultimately influence market sentiment.
Economic conditions - load shedding & elections
Economic conditions play a significant role in shaping buyer behaviour in the property market. Factors such as load shedding have had a substantial effect on buyer psyche and introduce uncertainty, which deters potential buyers from being concerned about the reliability of essential services where homes need more power backup solutions.
On the political side of the aisle, elections often shift government policies and priorities, creating a sense of instability among buyers. Uncertainty regarding potential policy changes, taxation, or economic reforms may prompt buyers to adopt a wait-and-see approach, delaying property purchases until the post-election landscape becomes clearer.
Real estate experts note that these external factors can lead to cautious buyer sentiment, causing some potential buyers to delay property purchases until economic conditions stabilise.
Perceived value vs. market price
Perceived value refers to the subjective assessment that buyers make regarding the worth of a property, taking into account both tangible and intangible factors. On the other hand, market price is determined by supply and demand, reflecting the prevailing economic conditions and transactional dynamics within the market.
Buyers evaluate properties based on various factors beyond just the numerical price tag. Factors such as location, neighbourhood amenities, architectural style, and overall condition of the property contribute to the perceived value in the eyes of potential buyers. Additionally, intangible elements such as emotional appeal, lifestyle compatibility, and future growth potential influence buyers' perceptions of value.
Real estate experts stress the importance of aligning market price with perceived value to attract potential buyers and facilitate successful transactions effectively. Pricing a property too high relative to its perceived value may deter buyers and prolong its time on the market, while pricing it too low may result in missed opportunities for maximising returns. Therefore, it is essential for sellers to carefully consider both objective market data and subjective buyer preferences when setting the price for their properties.
Sellers over capitalising
To avoid the pitfalls of over-capitalising or outpricing your property, real estate experts advise conducting thorough market research and pricing properties competitively to attract buyers in a competitive market environment.
Sellers should prioritise neutral design elements and upgrades that align with the standards and preferences of the neighbourhood, ensuring that improvements enhance rather than overreach the property's value. Also, seeking guidance from real estate professionals such as Homes of Distinction can provide valuable insights and expertise to make informed decisions on correctly marketing your property throughout the selling process.
Spoilt for choice
With many properties available on the market, buyers often need more time to choose. This abundance of options empowers buyers to be discerning in their decision-making process, carefully evaluating properties based on their preferences, budget, and lifestyle needs. Real estate experts stress the importance of differentiation and effective marketing strategies to make properties stand out amidst the competition.
Exit shift to seller's market
In recent months, there has been a notable shift in the property market towards a seller's market. This transition is characterised by decreased inventory levels and increased demand from buyers.
Real estate experts attribute this shift to various factors, including pent-up demand, favourable lending conditions, and a growing preference for property investment as a hedge against inflation. As a result sellers have gained a stronger negotiating position, with properties selling at or above asking prices in many instances.
Real estate experts emphasise the importance of understanding buyer behaviour and adapting strategies to meet evolving market demands. As the property market evolves, stakeholders must remain vigilant and responsive to changing buyer preferences and market conditions.
Are you looking to buy or sell your property? Visit our website at https://www.homesofdistinction.co.za/
Sign up for our newsletter: https://www.homesofdistinction.co.za/newsletter/
https://www.homesofdistinction.co.za/agents/ or pop by our offices for a chat. Our friendly property practitioners are always available to assist in this regard.
Homes of Distinction CC holds a Fidelity Fund Certificate issued by the Property Practitioners Regulatory Authority (PPRA).
Author: Bryce Anderson
