- Oct 2008 - BANK REPO - MILNERON, NAUTICA - R1 700 000
- Jan 2009 - MILNERTON / NAUTICA - BANK REPO - R1 700 000
You'll notice the price has not changed even though it's supposedly negotiable and supposedly below market value.
22 January 2009
When Bank Repos Don't Sell - Milnerton
You know the market is tough when even bank repos don't sell. Here's two ads for the same 3 bedroomed flat in a block called Nautica in Milnerton, one from the end of October 2008 and one from today.
You'll notice the price has not changed even though it's supposedly negotiable and supposedly below market value.
You'll notice the price has not changed even though it's supposedly negotiable and supposedly below market value.
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4 comments:
Among the properties I'm tracking there are still some palookahs actually raising their asking prices regularly. Most of these are in hellholes like Fourways in Midrand up north (where they still think it's 2005 and property is the Next Big Thing) but still there are enough doing it to suggest that we're still only in the very early stages of this meltdown. When Cape Town is 40% down, Gauteng will start to fall, and THEN let's listen to the wailing and gnashing of teeth. We ain't seen nothing yet.
Bean Counter
Interesting point about prices falling down in Cape Town first. I think it will fall first and faster in Jozi because Cape Town can somewhat justify/bullshit the prices because of lifestyle (beaches, mountains, drives, lack of crime compared to Jozi, etc.)
I actually think people in Jozi are going to wake up one day soon and realise that they paid so much for a tiny place only to live like prisoners in their own homes (alarms, burglar bars, etc.)
I am formely from Jozi and will never go back now that I know what I can get (lifestyle wise) in my own country. Imo, yes, property prices are overpriced in our country by 30% (avg.) but Cape Town is a hidden gem to me! Why on earth live in Jozi with all those mampara's when you can chill and relax in the mother city and have quality of life and peace of mind?
For the life of me, I can NEVER justify Gauteng price. Cape Town has something to offer other than slogging away in a job!!!
Sakkie, I agree with you. I'm also ex Jozi since a year or so back and I only go there occasionally on business to remind myself why I left... and I will never, ever go live there again!
Here's my theory:
It's not so much that property is over priced as that we find ourselves in a bubble caused by disparities. We have to look at the causes of 'over priced' to actually be able to say property is indeed over priced. The very first question is 'Can average people afford between 1 and 2 million for a stock standard medium sized 3 bedroom house?' and the answer is 'not really' and here's why
Firstly there IS a property bubble that that inflated as a result of easy credit (the credit bubble that is now only starting to deleverage), over leveraging, and the fatal perception by people that they have wealth in the equity they hold in their property
Secondly there is a vast a HUGE disparity between income and property prices. Property has inflated by +500% over the past decade while people's real income has remained stagnant or gone negative. This is absolutely fact. A house that would have cost you 100k in 1998 will now cost you a minimum of 500k (a bargain I reckon if today's prices are anything to go by)
Historically, property prices tend to follow inflation. While we have high inflation I think it's still obvious that property inflated well beyond our real inflation. And again, people are still earning (inflation adjusted) what they earned in 1998. The simple reality is that natural market forces always trends the spikes back to the mean and that means deflation in property prices.
Finally, there are today basically five kinds of property owners:
1. Those who bought before 2005 and dilligently paid off their bond. They're ok, but they're not as wealthy as they think
2. Those who bought before 2005, and who recently re-bonded and spent it all on beamers, holidays and LCD TV's. They're going to hurt soon
3. Those who bought from 2005 onwards and who are now staring negative equity in the face. They're hurting
4. Those who bought at any time within their means are ok but are paying a rich premium.
5. Speculators who leveraged to the hilt. They're going to fold first.
What I'm saying is 'over priced' is a function of how leveraged property owners are and that's the real issue here. We're staring a global recession (depression according to George Soros) in the face and it hasn't even taken a bite out of our economy yet. We've just started to feel it. This one is going to be drawn out and bad and it's going to last a lot longer than most leveraged home owners (or banks, just ask ABSA how worried they are about their 'parent') can stay solvent.
I am looking at house in around cape town and I am waiting for prices to come down. I live in the US now, have been for the last 10 years and visits RSA now and then, but I love South Africa, especially CT. I want to retire in RSA one day and am looking at properties. Shacks, after so many years, are kind of a turn-off. I wish the government would end this cancer in our beautiful landscape. Anyways, I am posting to say that houses in RSA are not necessarily overpriced relative to the 1st world but for RSA they are. Even with my American $$$ I can't afford most of houses in RSA, only I can live in a very modest home here in America (which I am not prepared to do) then buy a house in RSA. Anyways, I love RSA!
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