More massive reductions kicking in. This Camps Bay flat has been on the market since at least July 2007 when I first started monitoring it. Reductions as follows:
July 2007: R1,250,000
April 2008: R1,090,000
December 2008: R920,000
January 2009: R850,000
That's a 32% drop in asking price - now let's see whether it gets snapped up or not.
Catching up on the American housing carnage this morning and read that realtors in the worst-hit states (Nevada etc) are now seeing new houses falling below the $100,000 mark. For example, there's one place in west Las Vegas, newly built, 110 m2 place going for $89,900.
Okay, I understand that the US is probably overshooting in terms of price falls and that Las Vegas was the centre of the bubble universe, but $89,900 is about R940,000.
According to ABSA, that's not far off the average mid-segment home in SA. Which means that US homes in collapsing states are now starting to reach parity with SA homes.
Which is completely insane.
The more I read and hear, the more I really believe we haven't properly started our fall yet. 50%? 60% Are we going to see the return of the R100,000 two-bed flat?
For your weekend entertainment - a collection of FNB resident thumbsucker John Loos's pronouncements over the last couple of years:
“I think later in the decade towards 2008, house price inflation will start to pick up.” – June 2006
“So I don't see the end of house-price inflation for the country as a whole, and I think that by about next year you could start seeing a recovery in house-price inflation after some further decline this year...I think commercial property returns are going to be excellent for the rest of the decade.” – April 2007
“I expect to see a gradual uptick in demand for residential property towards the middle of the year...I don't think one should probably wait much longer. If one's holding out for price deflation I think you're probably going to be disappointed... I don't think it's a situation where we're going to see price deflation on a significant scale.” – February 2008
“You mustn’t count residential property out, from a point of view of getting into the market. The good time to get into residential property is probably just about here, as residential is probably near the bottom of the cycle.” – September 2008
AND THEN WE GET THIS...
“Yes, I’m afraid the whole global crisis has gone substantially further than most of us expected - it’s taken the property downturn that started back in 2004 to worse levels, and we’re into price deflation and there’s not a lot we can do about the situation as to where we are.” -- Business Day Summit business show transcript, January 13 2009
WTF?! So suddenly he’s saying he knew the downturn had started in 2004...Surely this man is liable for some sort of fraud?
The average price of a home in Detroit is now $18,513 and unemployment has reached 21%. I saw an article citing an estate agent in Detroit who had houses going for less than $1000 there. Sure, not a nice place to live with the crime and unemployment but it cannot be worse than SA. So at the bottom end in the US you can get a house for under R10 000.
If food shortages and civil unrest come here what does that bode for houses? Anti-government riots are kicking off in Lithuania and Bulgaria as well as Iceland in recent days and Estonia and Hungary at risk.
We are already in recession I am sure and we will definitely be in 6 months, We also tend to forget that we do not have the self sufficiency we used to have under apartheid, we are not food secure anymore for instance.
The biggest problem I see is the Trevor and Tito being booted out and Government dropping rates and turning on the printing presses, leading us into Zim style hyperinflation. People are clamouring for Tito to drop rates...but low rates are how we got here in the first place lol. If it goes this way then we might see a 10trillion rand 2 bed flat.
Well perhaps John Loos and FNB could be liable for misrepresentation (A false and material statement which induces a party to enter into a contract) If he was privy to facts as early as 04 and continued to talk up the market and advise people to buy, for FNB's benefit, then maybe yes.
John Loos along with Jacques du toit and estate agency bosses have been waxing lyrical about the property non-stop.
But one must put the predictions and statements into context as they have vested interests....huge ones.
However, there are millions of people in this country who are financially illiterate and have this sheep like mentality follwoing the herd to the slaughter.
I am active in the repo and auction market and hear on a daily basis the horrendous prices that some people paid for their property even as early as 2007, just before the NCA was introduced.
Just yesterday I spoke to a couple who purchased a flat in rugby near Milnerton who paid R720K for a two bedroom flat. The property now is worth at best R550K, if that. I was shocked that a bank could valuate this property so high and pass a bond on it.
There are countless stories of people buying at ridicolous prices just to get on the property ladder.
I know you have cross posted elsewhere on fractional ownership.
Do you or any other reader here know of any brokers who deal more specifically with the sale of individual hotel rooms, the type of deal where for R 300 000 you could buy a Protea room and have annual usage of 30 room nights?
I mean, there must be a re-sale market for these and other fractional ownership items, as well as golf club memberships.
One must also not forget what happened to rand from 2007 to 2009. In 2007 R1,250,000 was about USD178.500 (7:1) and EUR125,000 (10:1). Now R850,000 is USD83,000 and EUR64,000. So in currencies that we use to buy most of what we consume, that flat's value dropped 50%.
boughtmypoints: As far as I'm aware the resale market for fractional ownership is close to non-existent (which is why I would never advocate anyone buying into this one).
Pam Golding do seem to be the biggest punters of these schemes so you might try giving them a call.
11 comments:
More massive reductions kicking in. This Camps Bay flat has been on the market since at least July 2007 when I first started monitoring it. Reductions as follows:
July 2007: R1,250,000
April 2008: R1,090,000
December 2008: R920,000
January 2009: R850,000
That's a 32% drop in asking price - now let's see whether it gets snapped up or not.
Sorry, didn't leave the ref number for the flat. It's on www.privateproperty.co.za, ref number D7683.
Just something else to throw into the mix.
Catching up on the American housing carnage this morning and read that realtors in the worst-hit states (Nevada etc) are now seeing new houses falling below the $100,000 mark. For example, there's one place in west Las Vegas, newly built, 110 m2 place going for $89,900.
Okay, I understand that the US is probably overshooting in terms of price falls and that Las Vegas was the centre of the bubble universe, but $89,900 is about R940,000.
According to ABSA, that's not far off the average mid-segment home in SA. Which means that US homes in collapsing states are now starting to reach parity with SA homes.
Which is completely insane.
The more I read and hear, the more I really believe we haven't properly started our fall yet. 50%? 60% Are we going to see the return of the R100,000 two-bed flat?
BC
For your weekend entertainment - a collection of FNB resident thumbsucker John Loos's pronouncements over the last couple of years:
“I think later in the decade towards 2008, house price inflation will start to pick up.” – June 2006
“So I don't see the end of house-price inflation for the country as a whole, and I think that by about next year you could start seeing a recovery in house-price inflation after some further decline this year...I think commercial property returns are going to be excellent for the rest of the decade.” – April 2007
“I expect to see a gradual uptick in demand for residential property towards the middle of the year...I don't think one should probably wait much longer. If one's holding out for price deflation I think you're probably going to be disappointed... I don't think it's a situation where we're going to see price deflation on a significant scale.” – February 2008
“You mustn’t count residential property out, from a point of view of getting into the market. The good time to get into residential property is probably just about here, as residential is probably near the bottom of the cycle.” – September 2008
AND THEN WE GET THIS...
“Yes, I’m afraid the whole global crisis has gone substantially further than most of us expected - it’s taken the property downturn that started back in 2004 to worse levels, and we’re into price deflation and there’s not a lot we can do about the situation as to where we are.” -- Business Day Summit business show transcript, January 13 2009
WTF?! So suddenly he’s saying he knew the downturn had started in 2004...Surely this man is liable for some sort of fraud?
The average price of a home in Detroit is now $18,513 and unemployment has reached 21%. I saw an article citing an estate agent in Detroit who had houses going for less than $1000 there. Sure, not a nice place to live with the crime and unemployment but it cannot be worse than SA. So at the bottom end in the US you can get a house for under R10 000.
If food shortages and civil unrest come here what does that bode for houses? Anti-government riots are kicking off in Lithuania and Bulgaria as well as Iceland in recent days and Estonia and Hungary at risk.
We are already in recession I am sure and we will definitely be in 6 months, We also tend to forget that we do not have the self sufficiency we used to have under apartheid, we are not food secure anymore for instance.
The biggest problem I see is the Trevor and Tito being booted out and Government dropping rates and turning on the printing presses, leading us into Zim style hyperinflation. People are clamouring for Tito to drop rates...but low rates are how we got here in the first place lol. If it goes this way then we might see a 10trillion rand 2 bed flat.
Thanks for those quotes BC, I'm putting on the front page on Monday morning.
Well perhaps John Loos and FNB could be liable for misrepresentation (A false and material statement which induces a party to enter into a contract) If he was privy to facts as early as 04 and continued to talk up the market and advise people to buy, for FNB's benefit, then maybe yes.
John Loos along with Jacques du toit and estate agency bosses have been waxing lyrical about the property non-stop.
But one must put the predictions and statements into context as they have vested interests....huge ones.
However, there are millions of people in this country who are financially illiterate and have this sheep like mentality follwoing the herd to the slaughter.
I am active in the repo and auction market and hear on a daily basis the horrendous prices that some people paid for their property even as early as 2007, just before the NCA was introduced.
Just yesterday I spoke to a couple who purchased a flat in rugby near Milnerton who paid R720K for a two bedroom flat. The property now is worth at best R550K, if that. I was shocked that a bank could valuate this property so high and pass a bond on it.
There are countless stories of people buying at ridicolous prices just to get on the property ladder.
Sad but true.
CT,
I know you have cross posted elsewhere on fractional ownership.
Do you or any other reader here know of any brokers who deal more specifically with the sale of individual hotel rooms, the type of deal where for
R 300 000 you could buy a Protea room and have annual usage of 30 room nights?
I mean, there must be a re-sale market for these and other fractional ownership items, as well as golf club memberships.
Thanks.
One must also not forget what happened to rand from 2007 to 2009. In 2007 R1,250,000 was about USD178.500 (7:1) and EUR125,000 (10:1). Now R850,000 is USD83,000 and EUR64,000. So in currencies that we use to buy most of what we consume, that flat's value dropped 50%.
boughtmypoints: As far as I'm aware the resale market for fractional ownership is close to non-existent (which is why I would never advocate anyone buying into this one).
Pam Golding do seem to be the biggest punters of these schemes so you might try giving them a call.
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