Saturday Open Thread

Work is still kicking my ass so unfortunately updates are going to be reduced over the next couple of weeks. If you've got a story feel free to send it to capetownbubble@gmail.com. Here's the Saturday open thread.

Saturday Open Thread

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

Century City: 18 Months On The Market And Still Going Strong

This 2 bed flat in Century City has been on the market for at least one and a half years with the price bouncing up and down between R780 000 and R800 000. Will someone just buy it already and put the seller out of his agony.

And look at that view, Sandrift East never looked so beautiful...

Saturday Open Thread

It's the open thread!

Dubai? Really?

So this is a bit out my jurisdiction but I saw this ad running in the ad bar at the top of my own site and had to comment:

Seriously? Are there people still buying off plan in Dubai? That entire country has literally stopped building. Dubai is probably more screwed than most other places.

Rent Vs Buy: Stellenbosch

Here's a 3 bedroomed flat in Stellenbosch on the market for R1 500 000, with a monthly rent of R6000/month. According to the ad it's the 'best investment'. Considering it's in Stellenbosch I would assume it's a student flat which means one thing: high maintenance costs! Let's look at the yield/payment graph.



Paying for the place in cash gets you a 4.8% ROI with a downpayment over 67% required (over a R1 000 000) to just break even on cash flow. With a 50% downpayment you need a 2.66% capital appreciatin return to not lose any money at all. Take off rates, levies and maintenance and the returns drop even more.

Saturday Open Thread

It's the Saturday Open Thread

Waiting Won't Help; Hous Prices Won't Drop - Seeff

Reader MA sent in this scan from Die Burger circa June 2006:

The World Cup Will Do Sweet FA For The Property Market

If you're one of the suckers out there who bought an 'investment flat' in the past 2 or 3 years to cash in on the World Cup then I really feel sorry for you. The World Cup is doing absolutely nothing for the property market. Let's take a look at this example. Here we have a 2 bedroomed flat in Green Point literally across the road from the Green Point World Cup soccer stadium. It's on the market for R795 000 and attains a rental to the princely sum of R3000/month. Take off the monthly rates and levies of R312 and R598, which comes to a comes to R910/month, meaning that the net rental income is R2090/month. On a 100% bond your monthly bank payment is R9985/month and the difference between that and your rental income is R7795/month, a whopping 3.7 times the net rental itself! Let's take a look a the dismal yield graphs.



Ugh.. so paying in cash you can expect a maximum return on investment of 3.5%, about 7%-8% below just leaving your money in the bank. To break even on cashflow requires a 75% downpayment, over R590 000, and with a 50% downpayment you need 4.31% capital appreciation to not lose any money at all.

When 'investments' literally across the road from the World Cup stadium are doing as dismal as this then you have to laugh at the idiots advertising properties in Parklands and (I swear I'm not making this up) Gordons Bay as places to invest to cash in on 2010.