The last piece of privately-owned land in Svalbard archipelago in the Arctic is up for grabs. Picture: iStock
South Africa’s property market has experienced a surge in interest rates post the Covid-19 pandemic, making it increasingly difficult for homeowners to keep up with mortgage repayments.
The current interest rate is 8.25%. There have been 10 consecutive increases in interest rates since November 2021, totalling 475 basis points, before the rate stabilised in the middle of last year.
High interest rates often result in a significant increase in the number of properties being put up for auction, as sellers try to find a buyer quickly or banks try to sell homes they have repossessed.
South Africans, like many people around the world, have accumulated significant amounts of debt.
This, combined with high interest rates, places pressure on homeowners, pushing them to auction their properties to relieve their financial burdens.
“People had more money during the Covid-19 period because they were paying less on their properties and paying less on their loan repayments.
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“However, since the end of the Covid-19 pandemic, the interest rates have increased to a level worse than they were before the pandemic. The loan repayments have become too expensive for people, resulting in them selling their properties,” explained RealNet properties agent Zyx De Melo.
Joburg-based Seef property practitioner Landon Dade noted that there are more sellers than buyers in the market, although this may vary depending on the area, and so sellers may want to auction their properties to make a sale.
“In Johannesburg, there are more sellers than buyers, whereas in Cape Town there are more buyers than sellers. In certain provinces, you can switch between a buyer’s market and a seller’s market,” he added.
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While selling is a first point of call for many, auctioning your property can be convenient, quick and transparent.
“In some areas, auctions are not the go-to resort for a lot of sellers. That is because, when auctioning, you generally compromise your price slightly because you are trying to sell your property a little bit quicker,” cautioned Dade.
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The real estate industry has also seen significant shifts towards auctioning in the last few years.
“There is a really big movement with real estate getting into the auctioning space. These companies offer both real estate property transactions and auctioneering representation,” Dade explains.
An example of this movement is the partnership between RealNet properties and Van’s Auctioneers.
RealNet group CEO Gerhard Kotzé told Everything Property “selling by auction is well entrenched in the South African real estate market” and so the company decided to team up with the auction house to offer their clients “the best experience in selling or buying a home this way”.
When put on auction privately, the seller has to pay an often costly fee that can reach up to about R50 000. However, partnerships between agencies and auction houses mean this fee is often greatly reduced.
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