We all know that when you buy a repossessed property on auction, you pay less than the market value of the property. ABSA issued its newest residential report, indicating the price difference between newly built properties and existing properties.
According to ABSA’s newest residential report, prospective buyers will pay an average of 34,5% less (compared to building) when buying an existing house in a middle class neighborhood. The price gap between newly built houses and existing houses is the biggest in ten years.
Factors influencing the costs of building include material costs, equipment, transport and labour. On top of this you further have the profit margins of the developers and building contractors. These factors will also be calculated and included when developers resell the property, which in turn will also cause the property’s price to rise significantly.
On the other hand, when buying a repossessed property, you will already save some money since most repossessed properties are sold for well-below market value. When buying a repossessed property you will most probably save more than 34,5%. Keep in mind that no transfer duties nor rates and taxes up until date of registration need to be paid when you are buying a repossessed property on auction.
Why wait to buy? The best time to buy a repossessed property on auction is right now, with the inflation rate at on all-time low. Repossessed houses can be viewed at www.myroof.co.za. Happy house hunting!