It's that time of the week again, the Saturday Open Thread.
4 comments:
Anonymous
said...
The writing is on the wall in the Sunday Times today:
1) Whites deeper in debt than all other race groups combined. 2) 25-35 year-olds deeper in the doo-doo than anyone else 3) 82% of disposable income spent on servicing debt 4) 2,000 homes being repo'd every month 5) 100,000 homeowners have defaulted on their bonds 6) 25,000 in danger of losing homes
OK, so let's see. The richest population group, the ones who were supposed to be keeping this bubble inflated, is actually the poorest. First time buyers (the 25-35 set) are being herded en masse towards financial ruin. 2,000 homes are being dumped by the banks every month (if they're lucky enough to sell them at auction, which isn't happening). 25,000 more are about to be dumped on the market, and 100,000 are waiting in the wings.
To put that number in perspective, Remax's entire inventory for the greater Cape Town is about 6,000 properties.
I used to be skeptical about predictions of a 60%+ drop in property prices, thinking that 30% was more realistic. With this kind of news piling up, suddenly I think 60% might be right on the money.
i agree with your 60% For example properties in HoutBay will have to drop by at 50% if their owners want to sell. At the moment nothing is selling there and crimes are out of control.
The question is, if the property prices drop 60%, will the country still be functioning? Will the banks survive? Will the government freak out and do something stupid?
Why would government freak out? They do not have the best interests of the "rich" as a prime motivation. This is partly why South Africa has NOT reduced rates to save the property owner, unlike Aus, UK and USA. Rather, I would think they would be delighted that the up-and-coming middle classes might soon be able to afford to move into previously "rich" areas en masse.
4 comments:
The writing is on the wall in the Sunday Times today:
1) Whites deeper in debt than all other race groups combined.
2) 25-35 year-olds deeper in the doo-doo than anyone else
3) 82% of disposable income spent on servicing debt
4) 2,000 homes being repo'd every month
5) 100,000 homeowners have defaulted on their bonds
6) 25,000 in danger of losing homes
OK, so let's see. The richest population group, the ones who were supposed to be keeping this bubble inflated, is actually the poorest. First time buyers (the 25-35 set) are being herded en masse towards financial ruin. 2,000 homes are being dumped by the banks every month (if they're lucky enough to sell them at auction, which isn't happening). 25,000 more are about to be dumped on the market, and 100,000 are waiting in the wings.
To put that number in perspective, Remax's entire inventory for the greater Cape Town is about 6,000 properties.
I used to be skeptical about predictions of a 60%+ drop in property prices, thinking that 30% was more realistic. With this kind of news piling up, suddenly I think 60% might be right on the money.
Here's to buying dream homes for cash in 2010!
i agree with your 60%
For example properties in HoutBay will have to drop by at 50% if their owners want to sell. At the moment nothing is selling there and crimes are out of control.
The question is, if the property prices drop 60%, will the country still be functioning? Will the banks survive? Will the government freak out and do something stupid?
Why would government freak out? They do not have the best interests of the "rich" as a prime motivation. This is partly why South Africa has NOT reduced rates to save the property owner, unlike Aus, UK and USA. Rather, I would think they would be delighted that the up-and-coming middle classes might soon be able to afford to move into previously "rich" areas en masse.
Post a Comment