Factors that influence the asking price of property. (Ida du Plooy)

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When putting a house on the market, there are many factors that play a role in determining the asking price for the property. Both buyers and sellers should be aware of the factors that influence real estate marketability as they ultimately determine the value of property. Some of these factors include those of demographic change, progression and regression, and supply and demand.

Demographic Factors:

According to Jan Myburgh, General Manager of Harcourts Real Estate South Africa, “An important factor that determines price is the demographic change within a neighbourhood, be it negative or positive. All areas experience transformation, either in the form of growth or decay and these circumstances will severely affect the value of a property when it comes time to sell.” Currently the face of the greater Ballito is changing rapidly. In some areas expansion and new properties are clearly evident, while in other areas stagnation and deterioration is visible.

In circumstances where the demand for property far exceeds the opportunities available in the market place, the price of homes and rentals usually increase as people are willing to purchase at a higher price rather than risk no purchase at all. The strong demand for property leads to the building of more housing developments and accelerated growth in supply of property, such as South Africa had from 2005 to 2008. However, this often results in a surplus of housing which causes the reverse effect in the market, especially when the market is affected by unavailability of loans, high debt levels and unemployment like SA has had for the past 3 years.

Current Statistic’s on housing prices:

According to statistics by OOBA, South Africa’s largest bond originator, housing prices have shown a slow growth in recent times. In August 2014 the average house price was

R 982,297 growing by only 3.4% to August 2015 where the average price is currently

R1, 015,766. “This slowdown in housing prices is not surprising given that consumer confidence is at its lowest level in 15 years,” says Rhys Dyer Ooba CEO.

Change in utility supply:

Add the current problems experienced by local homeowners of water restrictions and load-shedding. All potential buyers are aware of additional costs to install water tanks, inverters and generators when considering buying property, where in the past they may only have taken renovation costs into account when making an offer to purchase.

Progression or Regression of an area:

Houses within a neighbourhood that all conform with each other as they are of a similar size and style with the same number of rooms, etc- will all fall within a similar price bracket and a similar value for these properties can be expected. However, the values of properties that do not conform within the parameters of the houses in the surrounding them may be affected by the principles of progression and regression.

The term “Principle of Regression” is used to refer to property of high value that due to its location within an area of lower valued properties is negatively affected and may suffer as its true value is not perceived. Similarly, the “Principle of Progression” refers to the increase in value of lower-valued properties which are in close proximity to houses of higher value. In short it means that the properties around you have a negative or a positive effect on the value/price on your property.


It’s all about location, location, location! It is best to buy the worst house in a good neighbourhood at a higher price than the best house in a bad neighbourhood at a lower price. You have to think about the future of your investment and make the decision that will be best for you as a home-owner in the long-run.

The secret is to “Start selling as soon as you have bought “Ask yourself – Why will someone buy this property again in the future? What are the current trends in the area that may influence you selling on again in the future.

When it comes to pricing your property to sell, it is advisable to call on your local estate agent, such as Harcourts Dolphin Coast, with a good track record and access to information of recent sales in your area, to assist you with establishing a market related price. But ultimately the true value of any property anywhere in the world will be determined by a willing and able Buyer and Seller

For FREE valuation and assessment on how to maximise the value of your property, call on us: HARCOURTS DOLPHIN COAST
032 946 2331
We are looking for experienced agents to join the Harcourts Dolphin Coast team. Mail us your CV.

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