Saturday, December 15

Correct valuation critical for good sale

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Sales could be delayed because properties have a book value greater than their actual worth.

Astute property investors scanning the market for acquisitions are seeing a vastly different property landscape from last year, says Norman Raad, chief executive of Broll Auctions and Sales.

Over the past three months the situation has changed significantly, with a new order in government and more optimistic outlook for the year ahead.

“Our auction last month saw a good turnout, with a prime income-producing 1700m² property in Norwood bought for R18million by a local investor.

“We believe this year more real estate investment trusts will sell non-core assets, providing an opportunity for property investors,” Raad says.

“However, a key factor is the valuation of these properties. Owner-occupiers are usually prepared to pay more than investors, but nevertheless, properties should be valued in line with the finance banks would provide.”

Sales could be delayed because properties have a book value greater than their actual worth.

“Property values need to be corrected. They are currently not in line with what the private sector would pay, hence the drag and lag of property sales and deal finalisation.”

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