And so it starts ... -15% in real terms ... and that is at the official inflation rate - check out here to see what inflation is really doing -www.tycoon.co.za/2008/03/13/graduated-fool-and-they-say-life-is-cheap-in-sa/ I reckon it is more like 20% a year if you look at an average of these figures - so that gives us a real house price drop of -25% which is kind of interesting.
If inflation is really 20% then if you look back at your interesting bank bond rate graph earlier, it seems very likely to me that we will be heading to the 20% bond rate peaks seen in the past.
Check out the Standard bank house price gauge - I never thought I would say this but there is some good stuff in there -
For example, new mortgages has dropped 50% in 7 months !!!
They also pretty much admit that house prices have to drop some more for affordability to return.
House debt to disposable income is at an all time high of 78%.
So in a nutshell, interest rates have to go up because inflation is much higher than stated. Which makes houses even more unaffordable ... so they have to drop even more. Its a one way bet - a big time crash is under way.
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And so it starts ... -15% in real terms ... and that is at the official inflation rate - check out here to see what inflation is really doing -www.tycoon.co.za/2008/03/13/graduated-fool-and-they-say-life-is-cheap-in-sa/
I reckon it is more like 20% a year if you look at an average of these figures - so that gives us a real house price drop of -25% which is kind of interesting.
If inflation is really 20% then if you look back at your interesting bank bond rate graph earlier, it seems very likely to me that we will be heading to the 20% bond rate peaks seen in the past.
Check out the Standard bank house price gauge - I never thought I would say this but there is some good stuff in there -
http://ws9.standardbank.co.za/sbrp/LatestResearch.do
For example, new mortgages has dropped 50% in 7 months !!!
They also pretty much admit that house prices have to drop some more for affordability to return.
House debt to disposable income is at an all time high of 78%.
So in a nutshell, interest rates have to go up because inflation is much higher than stated. Which makes houses even more unaffordable ... so they have to drop even more. Its a one way bet - a big time crash is under way.
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