Harcourts Blog

Rising interest rates, lowered COVID restrictions and increasing expenses, are but a few of the factors influencing the property market. What does that mean for the real estate in 2022. Over the past two years of the pandemic the real estate industry experienced interesting trends, that for the most part had a positive impact on the market. Record interest rate lows coupled with a major rise in demand by first time buyers translated in real estate companies reaching never before seen highs.

The past month's COVID Level 4 restrictions have undoubtedly impacted the economy and real estate market. The general feeling is that in most metros real estate activity remained buoyant and activity is on the increase, but we will have to analyse the data in the coming weeks to come to a true market identification.

Determining the true value of a property is one of the most crucial components of any transaction in the real estate industry. The entire valuation process comprises of various factors which ultimately lead to an accurate property valuation.

Is the true value of a property subjective?
Valuing real estate is a very particular process, due to the fact that each property possesses unique features, which are specific to that property; including location, erf size, floor plan and layout, as well as additional amenities. In addition, local knowledge and understanding of the market by the estate agent responsible for the valuation is paramount. An agent with an acute insight into their local market more accurately assess market value than that of an agent who does not understand the trends related to that region.

Unlike most commodities that are used quickly, the advantages of property are typically recognised over a certain amount of time. This also means that determining a property’s fair market value should take into account both economic and social trends, as well as legislative regulations and environmental factors which may affect the overall valuation; while general industry principles such as supply and demand will undoubtedly influence an individual property's value from a holistic perspective.

Although the valuation process is clinical by nature, homeowners will naturally have attached sentiments to their current property. A good real estate agent will also be able to keep this in mind to ensure that the final valuation is worth the homeowner’s while from a personal perspective.

In essence, a home is worth whatever a buyer is willing to pay and a seller is willing to accept. However, an experienced real estate specialist who works with both buyers and sellers in the current real estate market is not only able to access accurate data but also see two sides of the same coin. As a result, this insight allows them to decide best how to assess the true value of a property.

Connect with us on social media to share your thoughts on determining true market value.

The South African Reserve Bank's monetary policy committee announced yesterday that it has voted to reduce the repo rate from 6.5% to 6.25%. Therefore the prime rate will fall to 9.75%. Although this will certainly alleviate some pressures for those in debt we are a long way from saving a vulnerable economy.