I've been watching the price of vacant land in Oude Westhof the past 5 years. Prices have been well above R1 million for most of that time - in fact the better plots were well over R2 million.
I've now seen a few advertised for under R1 million and the best plots (previously >R2 million) down to around R1.5mm.
Just saw one for R900,000 and that would assume that the owner is expecting offeres in the R800 to R850k range.
Yes my observations are unscientific but these prices represent a HUGE drop from the highs 3 or 4 years ago.
That R900,000 plot would have sold for around R1,400,000 at the highest point of the bubble.
Yes - vacant land is much more negotiable definitely,I suspect because of desperate sellers now finding the noose tightening around their necks and no rental income from their vacant land. i.e the bond is still due at the beginning of the month, but there's no tenant on the land. I can see a wendy house boom coming maybe :) Owners might just start shoving wendy houses with portaloos and rain tanks on their vacant land. Some rental income is better than none I suppose. However,for example,try finding a desperate already built-on property seller in the Milnerton, Tygerhof area and you're left with only one sale in execution in Freesia Rd.Milnerton on the 19th of January. Prices just WON'T drop. The desperation of this "recession" is just not visible in certain areas. Why is this recession not hitting property prices down to the basement everywhere equally ? Aren't the Banks foreclosing left right and centre on delinquent bond repayers,be they high or low income earners ?? Seems not. A job loss has the same outcome,wether you're a high or a low earner not so ?
I suspect the banks won't foreclose on a massive scale because then property prices will really be driven down to what the market is prepared to pay,so it's just cheaper for banks to sit on a delinquent property,rather than selling at a discount and having to show a capital loss on their books. For as long as a bank doesn't foreclose,a property is still worth what the bank says it's worth, not what the market may decide it to be worth.
The bank is just,biding their time, hoping to find that desperate fool who is prepared to pay an inflated price. The real picture will only emerge 9to 12 months after this soccer world cup has left our shores I suspect.
3 comments:
I've been watching the price of vacant land in Oude Westhof the past 5 years. Prices have been well above R1 million for most of that time - in fact the better plots were well over R2 million.
I've now seen a few advertised for under R1 million and the best plots (previously >R2 million) down to around R1.5mm.
Just saw one for R900,000 and that would assume that the owner is expecting offeres in the R800 to R850k range.
Yes my observations are unscientific but these prices represent a HUGE drop from the highs 3 or 4 years ago.
That R900,000 plot would have sold for around R1,400,000 at the highest point of the bubble.
Yes - vacant land is much more negotiable definitely,I suspect because of desperate sellers now finding the noose tightening around their necks and no rental income from their vacant land.
i.e the bond is still due at the beginning of the month, but there's no tenant on the land.
I can see a wendy house boom coming maybe :)
Owners might just start shoving wendy houses with portaloos and rain tanks on their vacant land.
Some rental income is better than none I suppose.
However,for example,try finding a desperate already built-on property seller in the Milnerton, Tygerhof area and you're left with only one sale in execution in Freesia Rd.Milnerton on the 19th of January.
Prices just WON'T drop.
The desperation of this "recession"
is just not visible in certain areas.
Why is this recession not hitting property prices down to the basement everywhere equally ?
Aren't the Banks foreclosing left right and centre on delinquent bond repayers,be they high or low income earners ?? Seems not.
A job loss has the same outcome,wether you're a high or a low earner not so ?
I suspect the banks won't foreclose on a massive scale because then property prices will really be driven down to what the market is prepared to pay,so it's just cheaper for banks to sit on a delinquent property,rather than selling at a discount and having to show a capital loss on their books.
For as long as a bank doesn't foreclose,a property is still worth what the bank says it's worth, not what the market may decide it to be worth.
The bank is just,biding their time, hoping to find that desperate fool who is prepared to pay an inflated price.
The real picture will only emerge 9to 12 months after this soccer world cup has left our shores I suspect.
@ Anon:
Agreed with what you said. Wise words.
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