Property: How Auctions Can Benefit Sellers in a Buyer’s Market

South Africa’s property market continues to favour buyers, prompting sellers to adjust their expectations. FNB predicts a gradual increase to 3.8% by 2026, but buyers have greater negotiating power even when adjusted for inflation. Property transactions have notably declined compared to the post-COVID surge, mainly due to rising interest rates (despite the recent 25 basis point reduction), resulting in properties spending more time on the market. Sellers may need to price competitively to secure a sale.

Roy Lazarus of Park Village Auctions (PVA) notes, “Sellers face the decision to stay put or accept lower offers, possibly at a loss.” Sellers in a buyer’s market often turn to auctions for their swift transactions, where haggling is eliminated, and assets are realised almost immediately. This expedites the sales process without suspensive conditions.

Lazarus explains, “An auction gathers all buyers in one place at one time, avoiding lengthy negotiations.

“Sellers are not responsible for any commissions, and there are no further interactions between buyer and seller after the sale because all mandatory conditions are stated upfront before the auction.

“An auction is not a suspensive sale or conditional; it should be transparent so that buyers can weigh up the options and decide on the spot. At the end of the auction, “on the fall of the hammer,” the deal is final, and the proceeds are made available to the seller in a much shorter time.”

However, Lazarus advises that while auctions offer sellers numerous advantages, factors such as a property’s location will still influence performance. ” Buyers will do their homework ahead of time and have an indication of what similar properties fetch. It is important for sellers to set a reasonable, market-related reserve price.”

Park Village Auctions is registered as a professional valuer with the South African Council for the Property Valuers Profession (SACPVP) and is recognised as an appraiser to the High Court. PVA evaluates and disposes of properties across the board, including commercial and industrial, agricultural, deceased, insolvent, sectional title, and sequestrated estates.

ENDS