A look at the Cape Town property market.
According to the Sunday Times, repo's are up big time....and I quote ''Some property analysts expect the “homes repossessed” to almost triple this year to around 150000. These “distressed” sales often are negotiated at up to 40% below the real value of a house''.and to quote further ''Ben Pillay, chief executive of the Institute of Estate Agents of SA, said that even if interest rates fall again in February, it could take up to nine months for this to filter through to the residential property market. He added that house prices were “so badly overvalued that they would have to come down dramatically”.Read the full story at http://www.thetimes.co.za/News/Article.aspx?id=915633Makes for interesting reading!!
It is safe to say that anyone who bought a house in the last 2 years or so has overpaid and are now in a negative equity position. Also, the "distressed sales auctions" where properties sell for up to 50% of the outstanding bond illustrates the dire state of the property market.Until debt levels decline significantly and household balance sheets repair/rebalance, there cannot be any recovery in the property market. That process , called de-leveraging, takes years to occur.And the estate agents continue to trumpet the recovery in 2009! These people should be charged with criminal misrepresentation.
Do you self a favor to understand the housing bubble.http://www.chrismartenson.com/crashcourse/chapter-15-bubbles
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