30 May 2009

Saturday Open Thread

It's time again for the Saturday Open Thread.

12 comments:

Matthew said...

What's area to be looking for a small flat to buy for my parents? Any thoughts on Sea Point? Gardens? Has the bubble burst enough there or do you think there is still some value to be gained by waiting?

Bean Counter said...

I would be looking either in Detroit, or Riga in Latvia. Seriously, our bubble has only started bursting. When you read about average price drops of 20 or 30 percent - or when all the local banks' indexes (as well as Lightstone) show two or three consecutive months of upward movement - that's when you buy. Any time before that and you're flushing money down to the loo.

Anonymous said...

I'm youngish (29) - and can still afford to make mistakes, I no longer want to rent, and offered R1,595m for a place that was on the market for R1,895 - the offer was accepted, and then valued by the bank as R2,1m.

I'm pretty much happy with this purchase, and realize the bubble might still burst, but bought because it was a place I wanted - time will tell I guess.

Some might call what I did stupid - but if everything does go to hell, I feel the property will be the least of my worries.

Anonymous said...

The Standard Bank median house price index (smoothed) decreased by 4.1% y/y in May, following on average declines of 2.7% y/y in the first four months of the year...

LS

http://www.fin24.com/articles/default/display_article.aspx?Channel=News_Home&ArticleId=1518-2386-2401_2525620&IsColumnistStory=False

Anonymous said...

The latest FNB house price index showed house prices continued to plummet, with average values falling -11.3% in May 2009 year-on-year (y/y). That is the biggest price drop on record, suggesting that the SA Reserve Bank's 450 basis points rate cuts since December 2008 have had a negligible effect on housing activity

LS

http://www.fin24.com/articles/default/display_article.aspx?Channel=News_Home&ArticleId=_2525256

Matthew said...

If we are looking at 20 or 30% percent drops, is that year on year or is it from Peak to trough? Maybe I should just be really cheeky and offer 20% less than any asking price...

Anonymous said...

@Rtaxerxes

I offered 25% less, they accepted 20% less than advertised, which happened to be R95,000 less than what they paid for the property in 2005.

If you take into account transfer fee's, legal fee's etc. these guys have lost close on R250,000.

I might of been able to get another similar property for an even better rate in a year or two - but thats not of vital importance to me.

Anonymous said...

I'm curious what everyone thinks about property prices in the Durbanville area and surrounds over the next 24 months?
Do you think that prices could decline more?
I'm especially interested in the outlook for Durbanville areas like The Crest, Uitzicht and D'Urbanvale. Also thinking of Oude Westhof.

Anonymous said...

To add to my Durbanville question:
Need a large 4 or 5 bedroom home (around 300 sqm). Most are currently in the R2 million+ range.
Particularly interested in opinions on price movement.

CJ said...

4 bedroomed house worth R2m - rent would cost R10,000 a month - Buying monthly costs about R25,000.

Is buying so important to you that you are prepared to flush 15 grand down the loo every month ?

As for a bank valuing a house just sold on the market for R1.6m as being worth R2.1m, I would say that reflects total denial of the banks to accept that prices have fallen. If no one was prepared to pay more than R1,6m then that is the new value.

If the bank valuations are so inaccurate I would say that it is just as well that they are hesitating before lending. They are obviously fairly clueless.

Jules said...

Thx CJ.

No I don't want to flush money down the toilet, that's for sure. Will sit on the sidelines and see how the property market mess sorts itself out. Obviously hoping (expecting!) that prices will come down.

Tycoon said...

Bought a unit in Milnerton 2 years ago for R630k. My property has been valued at R530k!!!

If property is really that great an investment, then tell me why is it that the value today is worth less than the purchase price?