Old luxury homes listings Realtors blame unrealistic sellers
Tuesday May 16 2023
Has your home been sitting on the market for ages despite listings on multiple platforms? Realtors say you’re the problem.
While there are many reasons for a home to lack offers over years of listing, realtors say a non-bulging, unpragmatic seller is one of the main issues.
Some multimillion-shilling luxury homes have been in the market for years, as realtors and homeowners tussle with price cuts and low purchasing power.
But whilst the tussle ensues, realtors point out that the net loser is a seller who suffers property depreciation with increased modernisation of architectural designs and materials.
Globally, Knight Frank’s Prime International Residential Index (PIRI 100) shows that the average luxury house price growth slowed to 5.2 per cent last year.
Nairobi reported a 3.8 percent growth in annual luxury residential prices in 2022.
The report reads, “The transition from a sellers’ to a buyers’ market is well underway, though limited prime stock in several major cities, exacerbated by the pandemic, is putting a floor under luxury prices.”
That means the scales are tipping in favour of buyers due to high supply having them spoilt for choice.
“For the last few years we have been through a difficult period with the Covid-19 pandemic, the fate of the election which had created uncertainty in the economy,” says Tarquin Gross, the head of residential at Knight Frank.
“If the market was perfect and there were no issues and it [a home] was sitting in the market for a while usually, it’s a price-related matter,” notes Mr Gross.
“If a home is not selling, the price is typically wrong and usually that price is the price that the seller has chosen rather than was advised by the realtors.”
Mr Gross says a luxury home sitting on the market for years has to be in a very prime location with huge chunks of land to avoid huge depreciation of value.
“If you’re selling a property over Sh200 million, it’s going to be in your prime location where land value is very high, it could be Muthaiga, Karen, or at the Coastal region or 100 acres in Nanyuki,” he reckons.
A representative of a South African real estate company with operations in Kenya who requested anonymity for fear of compromising local contacts says it has disengaged some sellers whose homes have been in the market for a long time and had refused to readjust their prices.
“We don’t have anything old or property that doesn’t move in the market because part of our company policy is if sits for too long and we’ve tried talking to the seller to price cancel or reduce the price, we usually drop the mandate,” Carl* says.
“If it’s not a lands issue, we don’t list properties that do not move, so usually we disengage if all the advice the experts have offered is not sufficient.”
Experts cite title deed issues, or the adoption of a wrong marketing strategy as other reasons for luxury properties staying in the market for long.