Saturday Open Thread

Got something on your mind we haven't covered? Chat about it in our Saturday Open Thread...

Overheard At The Deli: "I mean you'd have to be absolutely f$%^&$%g mad to buy now."

The following report was sent in by reader Bean Counter:

Was just having my afternoon cuppa and catching up on some work at the deli near my house when I realised two estate agents were having a fat chat at the next table. Unfortunately I didn't catch the names of either of their companies, but I gathered that both are pushing property in the northern suburbs and on various wine/golf estates out Somerset West way.

At first neither of them wanted to talk about the deathly state of the market, a bit of professional rivalry I suppose. But soon they cracked and the tales of woe started. And did they start. I had to write down one part verbatim, it was too priceless not to pass on as it came from the horses' mouths (always knew that shorthand course would come in handy!):

Estate Agent A: "What people are asking, they're just clueless, still."
Estate Agent B: "They should show the selling price. Completely different."
EAA: "Completely different, the asking and the selling. I mean what they're selling for now was what they paid three years ago."
EAB: "Four years."
EAA: "Absolutely. They've lost all the money they made in the last three years."
EAB: "Totally."
EAA: "I mean you'd have to be absolutely f$%^&%#g mad to buy now."
EAB: "But people can't sell, hey, because they're not dropping their price, like, 40 percent!"
EAA: "You'd have to be mad. I know okes who are buying, they're fucked."
EAB: "Nice for us, hey?"
[A short embarassed laugh.]

Request For Information: The Majestic - Kalk Bay

Any readers out there have any information on what's going on at The Majestic development in Kalk Bay? I checked it out when it was initially built and the prices were horrendous. Looking at the site I linked to it seems there's still plenty stock left to be sold .

Saturday Open Thread

It's Saturday, which means it's time for our weekly open thread...

Rent Vs Buy: Rondebosch

Purchase price: R680 000. 100% bond: R9 206/month.
Rental: R3 200/month before rates, maintenance and vacancy.

62.24% (R443 642) deposit required to break even on cash flow. 5.65% ROI when paying in cash. 2.48% capital appreciation required with 50% deposit.

Rent Vs Buy: Milnerton - Royal Ascot

Purchase price: R1 180 000. 100% bond: R15 975/month
Rental: R5 500/month before rates, maintenance and vacancy.

65.57% (R773 760) deposit required to break even on cash flow. 5.59% ROI when paying in cash. 2.53% capital appreciation required with 50% deposit.

Our Favourite Simon's Town McMansion Drops The Price (Again)

Our favourite Simon's Town McMansion has had another asking price drop. Back in August it went from R3 600 000 to R3 500 000 (a massive 2.7% price drop!) and has now been dropped to R3 200 000. That's about a 8% asking price drop. I guess these folks have never heard of chasing the market down.

Considering this house looks like it has been sitting empty since February at least someone is taking a bath on this thing.

Thanks to reader GT for sending us the link!

Rent Vs Buy: Malmesbury

We usually don't go this far out of Cape Town but here's a house for sale in Malmesbury, or rather as it says in the ad 22km behind Malmesbury and 6km inland, with an asking price of R990 000. With a 100% bond you'd be paying just over R13 400/month. Or you could rent it for R3 300 a month, just over 3 times the monthly difference (R10 103) between the rental and bond price. Here's the yield and payment graph.

That's pretty bad. A 75% downpayment to break even on cash flow and a just over 4% ROI if you buy in cash. But ignore that because the price of property 100km from Cape Town and 6km from the coast are just set to skyrocket right?

Saturday Open Thread

It's that time of week again, the Saturday open thread.

Simon's Town: Buy The House, Get The Car

Desperation is starting to set in it seems. Here's a 3 bed house in Simon's Town for sale for R1 985 000 and if you buy it you get a free 2000 Land Rover Freelander. Now the car may be free but the insurance and maintenance (and petrol) aren't...




Thanks to reader HJ for the link!

Update: This house is in Glencairn Heights, not Simon's Town. Sorry if I offended any Simon's Towners.

SA Savings Rate Goes Negative

SA saving habits 'unsustainable'

South Africa's saving rate has dropped from 2.7 percent in 2001 to a negative rating of -0.5 percent in the second quarter of this year, the SA Saving Institute said on Tuesday.

Rent Vs Buy: Sea Point Quickie

1 bed flat, R750 000 asking price, R3500 monthly rent.

Saturday Open Thread

It's that time of the week again, the Saturday Open Thread.

ABSA: Forget About 2009

From RealEstateWeb;
Bleak property outlook for 2009 - Absa

Big bank Absa (JSE:ASA) has warned that the property pain is set to continue into next year and said the housing market has cooled off "to levels not seen in many years".

Its October House Price Index, released on Thursday, still shows nominal year-on-year house growth (1,2%), but at its lowest level since January 1993.

With inflation at just over 13%, a little lower than 13,7% year-on-year in September, in real terms house prices in South Africa are falling. The figure for September is -10,1%, said Absa.

Looking at the price trends, said senior property analyst Jacques du Toit, "nominal year-on-year house price growth is at risk of moving into negative territory in the near future".

So if house price growth is still nominally positive, and the trend is for it to move into nominal negative territory and you bought a house, you would in fact be doing nothing more than "renting from the bank" for three to four times the cost of actually renting an equivalent property.

It's Birthday Time In Parklands

Reader Bean Counter writes:

As you know I've been monitoring Remax's inventory for some time now, and the following Parklands McMansions are celebrating their first birthday on the site - for sale since 5 November 2007 (at least - some of them may have been on the market from before I started monitoring).

The lucky 1st birthday losers are as follows (ref number):

300129425 - reduced price from R2.2 million to R1.97 million in July, but it hasn't helped
300124769 - reduced from R1.99 million to R1.59 million in July.
300053213 - no reduction, no action.
300145659 - no reduction, no action.
300126745 - no reduction, no action.
300057755 - this beaut actually raised his price from R1.78 million to R1.85 million in February - yeah, that's really going to help it sell.
300132504 - no reduction, no action.
300147733 - no reduction, no action.
300134038 - no reduction, no action.
And finally, this one - 300114217 - who raised from R749,000 to R760,000 in May - roughly what you'd have to pay me to live in this deeply depressing little piece of sandblown hell.

Thanks for the info BC!

Atlantic Seaboard Hits The Wall

Atlantic Seaboard struggling

The swanky Atlantic Seaboard, which until recently appeared to be reasonably immune to the overall housing slump, is now also being hit by negative sentiment.

New data from Seeff Properties' Atlantic Seaboard office show that sales of sectional title apartments in Fresnaye, Sea Point and Bantry Bay have halved from January to October 2008 (y-o-y).

Seeff sales specialist Adrian Mauerberger says in 2007 around six apartments were sold every month in this area in the price range R2m plus. Atlantic Seaboard apartment sales are now down to an average three per month.

More worrying is the large number of units coming on to the market. According to Mauerberger's statistics, some 117 sectional title apartments are currently for sale on the Atlantic Seaboard. He says given that only three units are selling every month it would take 40 months (or more than three years) to sell all of this stock. "That's assuming that not one further listing comes on to the market.'

Thanks to reader TA for the link!

Saturday Open Thread

It's our weekly Saturday open thread.