30 January 2010
23 January 2010
Saturday Open Thread
It's the Saturday open thread! Want to talk about something we haven't covered? Now is your chance.
22 January 2010
Some Orangerie Gossip
Orangerie Week continues! There's nothing we love more here then a nice piece of skinner (that's gossip for you non-Afrikaans speakers). This from the comments section in an earlier entry on the Orangerie:
I do hope these agents are making sure that when they show potential buyers around the Orangerie they show them apartments that they don't have a financial interest in.
I have been told that all the flats on top floors were bought off plan by estate agents, before the public knew about the flats going to be built.
I do hope these agents are making sure that when they show potential buyers around the Orangerie they show them apartments that they don't have a financial interest in.
20 January 2010
The Organgerie: Rent Vs Buy (Again)
Folks it's Orangerie week here on Cape Town Property Bubble, because it's the gift that keeps on giving. For instance here's a 2bed/2bath 157m2 apartment in the Orangerie for rent at R14 000/month. Despite overwhelming demand, five days later the same flat is now available for sale at R3 400 000.
On a 100% bond your monthly payments are R33 944/month, the difference between that and the gross rent being R19 944/month or about R240 000/year. Added to that the bond costs are R275 000, worth about 20 months (1 3/4 years) rent. And that's all for gross rent. Take away levies (which I will bet are not cheap in this block), rates and maintenance and the picture gets even worse.
Here's the yield graph:
To break even on cash flow you need to put down just under R2 000 000. I repeat to not lose ANY money at all you need to invest close on two bar. Paying for the place in cash you can expect a ROI of just under 5%.
On a 100% bond your monthly payments are R33 944/month, the difference between that and the gross rent being R19 944/month or about R240 000/year. Added to that the bond costs are R275 000, worth about 20 months (1 3/4 years) rent. And that's all for gross rent. Take away levies (which I will bet are not cheap in this block), rates and maintenance and the picture gets even worse.
Here's the yield graph:
To break even on cash flow you need to put down just under R2 000 000. I repeat to not lose ANY money at all you need to invest close on two bar. Paying for the place in cash you can expect a ROI of just under 5%.
19 January 2010
The Organgerie - It Gets Worse
If you didn't like the 2 bed/2 bath flat in the Orangerie for R2 975 000, then perhaps you'll want to invest in a 1 bed/1 bath flat. Only R2 650 000. For 85m2 which works out to about R31 100/m2.
18 January 2010
Ballinrobe: Still Not Finished
Our regular Sea Point writer PJ write in about the Ballinrobe development, which we last heard about in August 2008:
Guess what, it's a year and a half later and Ballinrobe is still a concrete shell uglying up High Level Rd. Looks like my prediction of them finishing it in June 2010, 2 years after they were supposed to finish, is more prescient than ever. I wonder if all of the off plan buyers are still alive it's been so long...
16 January 2010
14 January 2010
Rent Vs Buy: The Orangerie
Finally! After watching it being constructed The Orangerie in Orange Street is finished! Out of the way welfare pensioners (a CPOA old age home was demolished to make way for it)! We need some shoddily built overpriced apartments.Anyway so we haven't had a Rent Vs Buy analysis in a while so why not today. Here's a 2bed/2bath apartment on the market for R2 975 000.That means on a 100% bond you will be paying R29 701/month. Or you can rent the exact same apartment for R11 750 (that's gross not net). Now to be clear I would never advocate anyone rent a 2 bed apartment for R11 000+/month but that's just what the asking rate is at the moment for this joint (and that's if they achieve it). The difference between the bond and the rental is R17 951/month meaning that after year one you'll have lost R215 000. And it gets worse, the transfer duty on this property is over R230 000, which means you could rent this place for two years and be in the exact financial position as someone who bought it, except they will have paid in over R600 000 in bond payments in that time. Will capital appreciation make up the difference in two years?
I'd just like to add a final thought here: For close to 3 bar I'd like a decent kitchen, not a 'kitchen nook' in the middle of the dining/living area or whatever name developers call it.
Here's the yield graph:
So a deposit of R1 800 000 is needed to break even on cash flow. Paying for the whole place in cash gets you 4.74% ROI and that's before levies (which won't be cheap for this place), maintenance and vacancy costs.
Anyone got more info on the Orangerie? Is it a ghost town? Let me know at capetownbubble@gmail.com
11 January 2010
09 January 2010
Saturday Open Thread - How's The Selling Season Going
The selling season is in high gear. Let us know how it's going in this open thread.
04 January 2010
Camps Bay: Sales Hit The Brick Wall
Reader GD writes:
Update: This was originally posted on realestateweb in 2009. If anyone has current number of how many houses sold in 2009 in Camps Bay let me know.
Saw this statistic posted over at this thread on relestateweb. If it's true... OUCH!
SAPTG suburb trend: Camps Bay
Year No. Sales 2007 120 2008 88 2009 3
Now assuming conditions don't get worse (highly unlikely), looks like Camps Bay is forecast for 12 sales year ending 2009 - an unhealthy 86% drop in volumes.
Update: This was originally posted on realestateweb in 2009. If anyone has current number of how many houses sold in 2009 in Camps Bay let me know.
02 January 2010
Saturday Open Thread - Predictions for 2010
It's the first open thread for 2010. What's going to happen this year?
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