Properties that sold before auction and why vendors accepted

In June, 27% of properties slated for auction in Johannesburg sold before the auction date, a trend that has left many in the industry wondering what drives vendors to accept pre-auction offers.

This phenomenon matters now because it indicates a shift in the way buyers and sellers interact in the city's property market. With the average house price in Johannesburg sitting at around ZAR 1.5 million, and premiums in areas like Sandton, vendors are under pressure to get the best possible price for their properties. The growth of areas like Fourways and Midrand, coupled with urban renewal efforts in Melville, means that buyers have a wide range of options, and vendors need to be strategic about when and how they sell.

In areas like Soweto and Randburg, properties are being snapped up quickly, often before they even make it to auction. The Johannesburg Property Association has noted that properties in these areas are particularly popular with investors, who are drawn to the potential for high returns. Sectional title properties, in particular, are in high demand, with complexes like those found on Oxford Road in Rosebank and Main Road in Bryanston proving popular with buyers. The City of Johannesburg's urban renewal initiatives, such as the Inner City Regeneration programme, are also helping to drive interest in areas like the CBD and Braamfontein.

Drilling down into the data

A closer look at the numbers reveals that the majority of pre-auction sales in June were for properties priced between ZAR 800,000 and ZAR 1.2 million. According to data from auction house, Bidstream, 62% of properties sold before auction in this price range, with the average sale price coming in at ZAR 1.01 million. The fastest sale was a property on Rivonia Road in Sandton, which sold for ZAR 1.3 million just 10 days after being listed for auction. On the other end of the spectrum, a property in the south of Johannesburg, on the corner of Compton and True North roads, sold for ZAR 750,000 after being on the market for 32 days.

So what happens next for vendors and buyers in Johannesburg's property market? With the market showing signs of slowing down, vendors who are considering selling their properties at auction would do well to consider the benefits of pre-auction sales. By being open to offers before the auction date, vendors can avoid the risks and uncertainties associated with the auction process, and potentially get a better price for their property. As the market continues to evolve, it will be interesting to see how this trend plays out, and whether pre-auction sales become the new norm in Johannesburg's property market.