While expectations among some quarters are high that Tzaneen is on the edge of an economic boom as a result of steady growth in property values and tourism levels over the last six months, a local real estate practitioner has warned that consistent over-pricing by sellers is bound to impact negatively on the real estate market in the near future.

Commenting on local real estate trends, Louise van der Zee, principal of Realty 1 Elk Tzaneen, said she was expecting the next two years to be characterised by growth as work on the new Kruger National Park highway progressed and demand continued unabated for both residential and investment properties.

Investor buying among local residents keen to capitalise on the buy-to-let market was particularly strong for townhouses in the R300 000 to R350 000 price range, she added.

Monthly rentals received from tenants occupying these properties generally covered between 80 and 90 percent of the investorsi bonds in the first year or two, after which the properties could be expected to pay for themselves as a result of annual escalations which averaged around 10 percent.

But, she warned, a high number of sellers were asking unrealistic prices for their properties and as a result, condemning themselves to spending months on the market as well as artificially inflating property prices in the area. Van der Zee said that some sellers remained impervious to advice to bring their prices in line with market-related values.

As a result, the properties become over-exposed, the resultant effect of which is that many people are unable to sell their homes and some even risk losing them to the banks due to affordability problems, she said.

Correct pricing from the outset, however, enabled sellers to realise quick sales at market-related prices since demand far exceeded supply. She remained confident that property prices would continue to show a positive return on the back of 30 percent increases over the last six months.