Rent Vs Buy: De Waterkant (Again!)

We've focused a lot on the De Waterkant area of Cape Town in the past because it is one of the prime areas where the rent vs. bond payment ratio is completely out of whack. Take the following example. Let's say you want find a 2 bedroomed place in De Waterkant. Here's a rental ad from today's paper:

DE WATERKANT/Loader Street. Double storey comprising 2 b/rms, bath/rm (upstairs), Lounge, diningrm (d/stairs). 1 Feb, R4 500pm %

But how much will it cost to buy something equivalent. Well here's a 2 bedroom/1 bathroom De Waterkant property going for R 2 590 000, although I'm unsure if it's a flat or apartment. Here's something closer to what we have, a 2 bed/1 bath house on Loader street (same street as the rental property) and it's a steal at an asking price of only R3 200 000.

Now if we take an average price of R2 900 000 for a 2 bedroom house(cottage is more the word really) you'll be paying a whopping R33 975 a month with no downpayment and R30 460, R29 100, R12 019 a month with a R300 000, R600 000 and R1 950 000 downpayment respectively.

At most renting will save you a whopping R29 475 a month and with a massive 50% downpayment renting will still be R7 519 cheaper a month. That's madness!