Time for our weekly Saturday open thread. If you've got anything you want to discuss about housing and real estate in Cape Town and South Africa, this is the place.
3 comments:
Anonymous
said...
Hi Can I have some comments on the following: I noticed from different web sites (one in Holland, the other in the USA) that the house prices will settle @ app 3,5 times the average income. That's were the equilibrium is. Average income/year 1987: Dfl. 42.000 Av. house prices Holland 1987: Dfl. 145.000 Dfl Av. income/year 2008: 30.000 Euro's Average house prices 2008: 240.000 euro's (!) This means house prices have to decrease with min. 50%. Source: www.deepjournal.com
What is the SA average income/ house prices. How far do we have to go down before reaching equilibrium? Any opinion on the time span? 4 years - 7 years ?? Thanks
I'd be wary of reading too much into simple averages of income to house prices. South Africa's income inequality is very different from that in the US or The Netherlands so it's a stretch to believe this will be constant across dissimilar countries.
3 comments:
Hi
Can I have some comments on the following:
I noticed from different web sites (one in Holland, the other in the USA) that the house prices will settle @ app 3,5 times the average income. That's were the equilibrium is.
Average income/year 1987: Dfl. 42.000
Av. house prices Holland 1987: Dfl. 145.000 Dfl
Av. income/year 2008: 30.000 Euro's
Average house prices 2008: 240.000 euro's (!)
This means house prices have to decrease with min. 50%.
Source: www.deepjournal.com
What is the SA average income/ house prices. How far do we have to go down before reaching equilibrium? Any opinion on the time span? 4 years - 7 years ??
Thanks
According to ABSA the average house in South Africa is about R900 000 to R960 000.
That means the average salary in SA should be R300 000 to R320 000 a year. Which I can almost guarantee that it is not.
I'd be wary of reading too much into simple averages of income to house prices. South Africa's income inequality is very different from that in the US or The Netherlands so it's a stretch to believe this will be constant across dissimilar countries.
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