Recently and in the past there has been the ever asked question on everybody's lips... Why are the house prices in Tzaneen so expensive??
Under an ever changing economy and political factors, it is undeniable that prices in all sectors are affected. This includes house prices. House prices in Tzaneen seems abnormally expensive but taking in consideration a few factors one would certainly understand the growth in property prices and also realize that property is and remain an excellent investment.
Looking into these factors the most important currently is that Tzaneen is very low on properties, due to Tzaneen not having proper infrastructure to allow growth.
The current population in Tzaneen Town is about 33 000. About 480 000 people reside within a 19 kilometer radius from Tzaneen.
All these clients compete in the same property sector in Tzaneen.
With the change in times people became more aware of the importance of owning a home. As it stands Tzaneen is extremely under stocked in the property market due to more people wanting to buy properties.
With the current infrastructure and land shortage, no new houses are being constructed in town, besides the houses constructed on previously proclaimed stands in Security estates such as, Riverside, Golden Acres, Letaba Real Estate and Aquapark North. Unfortunately there were only limited amounts of stands of which 90% was sold out during the first 3 months of being on the market.
The shortage of stock therefore causes a higher question than demand, which in turn create higher asking prices.
Furthermore due to the flood damage in KZN, the war between Ukraine and Russia, corruption, instability of Eskom, poor political leadership, petrol price increases and many more factors, building costs and building materials just sky rocketed. In the past houses could be constructed between R5 500 and R6 500 per square meter. Currently houses are being constructed between R12 000 and R15 000 per square meter depending on finishes. This will not stabilize any time soon, on the contrary, it will just get worse. This factor is then causing a huge demand for already constructed and older properties, in turn increasing the prices.
Now clients ask the question. Am I not paying too much? The answer is no. If a client deals with a qualified, experienced and professional agent, the agent will always guide and explain the situation pertaining to a purchase price. If an agent is appointed to sell a property there are a few things the agents advise and lead sellers on how to determine a selling price. Firstly a deeds office report is pulled to determine the sales in the area. From there certain factors are looked into, such as improvements, location, size and condition of the property. According to those factors a market related selling price is determined. One thing to keep in mind is that the banks work on exactly the same structure. Meaning that there cannot be a ridiculous price put onto a property. On conclusion of a sales agreement and on loan application, the bank will send a qualified property valuator to do a valuation. If the valuator determines the price is too high the loan will be rejected based on the purchase price. The bank will then give a counter offer of what they determine the property value to be worth. Meaning that this also protects the buyer from unrelated market values on any property at any certain time.
It is therefore crucial that a buyer and Seller deal with an experienced area agent to ensure a successful sale. Always make sure to ask for proof of the agent's qualifications as well as a valid Fidelity Fund Certificate. Never deal with unqualified agents and NEVER pay monies into agent's accounts. ALWAYS pay into an Attorneys trust account.
Be money wise and financially safe!
Happy house hunting.