Yea or Nay? Personally I wouldn't touch anything built in the last seven years.
18 comments:
Anonymous
said...
I would generally also not buy modern - in terms of artisinal workmanship quality and materials build quality. No value for money.
And I would only go for freestanding/freetitle clay brick properties pre 1988 with separate kitchens old school style.(no clanging of plates and smell of sauerkraut cooking in the lounge thank you :)
When I hear the words "Body corporate and "Levies" I run a mile. The same with Golf/Lifestyle gated Laagers (I beg your pardon - villages) Any property I buy, I first calculate seeing myself being able to stay there.
The term "modern" is a bit deceptive. There has barely been any advancement in residential building construction techniques for the last 50-60 years. We have technological lock-in. Very little about how we construct houses today wouldn't be instantly understood by an ancient roman.
C&P from the IOL website for the Cape Argus. Looks like debt is becoming a problem and I'd bet that it's the big mortgage bonds doing them in...
'Wealthy' consumers begin to default March 8, 2010
Over-indebtedness and the inability to meet obligations has not been confined to the "less fortunate", a debt counselling agency said on Monday.
Wealthier consumers had also begun to default, Debtbusters said in a statement.
According to the most recent statistics released from rental research agency Tenant Profile Network, one out of five tenants paying rent of R12 000 per month and more did not make their payments in the fourth quarter of 2009.
"This is almost double the reported figure in the third quarter of last year," Debtbusters MD Luke Hirst said.
According to the data, 82 percent of all tenants in the R3 000 to R7 000 per month bracket and 79 percent in the R7 000 to R12 000 month rental bracket all made their rental payments. This showed the current economic climate and over-indebtedness was hitting upper income brackets hardest.
Hirst said this was in line with his view that the middle to upper income brackets had over-extended themselves in the boom years and were now paying the price.
"While the country is officially out of recession, the situation for the average South African consumer does not seem to be looking up," Hirst added.
With 870 000 job losses in 2009 and thousands more taking salary cuts, the capability to pay rent and meet other obligations was not promising.
Hirst added that consumers needed to cut their losses while they were able and not bury their heads in the sand.
"Lifestyle adjustments are essential, and this includes budgeting at all times and making certain sacrifices, which may include moving to less expensive rentals," Hirst said. - Sapa
I live in Dbnvl & have noticed a house down ther road has been in the market for +/-12months, He has come down from R1,3m to R850k & still cannot sell.
Friends of mine in a complex (also dbnvl) bought 3 yrs ago for R1,060m, their neighbour (exactly the same type of house) sold last month for R980k.
Yet when a friend had his house evaluated late last year - the estate agent gave him en estimate of R2,6m. The house has been in the market for +/-18 months & the best offer to date has been R1,8m.
CJ I think the reason why people aren't talking about a crash is because circumstances aren't as dire as they were in the USA when their market crashed. What I mean is, there aren't several million people facing ARM loans where the repayment spikes after a year or two - forcing the homeowner into a "must-sell" situation.
But yes, the fact is Cape prices are much lower now in terms of supply & demand, but at the same time, not that many people must sell. That is helping to keep the bottom from falling out from the market.
My "guestimate" is that current prices are at about the low water mark and, instead of prices falling further (and faster) like we saw in the USA, there will be several years of flat prices. When you factor in inflation and the time value of money, the prices will eventually become more affordable.
Based on the above, a lot of potential buyers will wait and wait because they are afraid of buying too soon in a buyers market. Will low demand, it's not likely that we will see much price growth for the next 3 to 5 years in most areas. Yes foreign buyers might still snap up property on the Atlantic seaboard but that will be the exception to the rule...
Negative, you idiot. Prices are falling now and falling fast. The thing that's keeping the bottom from falling out is the World Cup. Everyone is trying to hang onto that second and third property hoping to rent it out or sell it for some exorbitant amount. Saffers finances are spread too thin. They're using savings to keep their heads above water...treading treading, hoping things will pick up. But, they won't. There will be a huge dump a few months after the world cup. It will be a price slashing race to sell these places and hopefully not foreclose on their primary residence. But there will be no bailout my white friends :(
Negative, you idiot. Prices are falling now and falling fast. The thing that's keeping the bottom from falling out is the World Cup. Everyone is trying to hang onto that second and third property hoping to rent it out or sell it for some exorbitant amount. Saffers finances are spread too thin. They're using savings to keep their heads above water...treading treading, hoping things will pick up. But, they won't. There will be a huge dump a few months after the world cup. It will be a price slashing race to sell these places and hopefully not foreclose on their primary residence. But there will be no bailout my white friends :(
At 6% inflation you need 15 years of flat house prices to give us the 55% to 60% real drop that the graphs show we need.
So we either need higher inflation or lower house prices to speed the process up. Higher inflation will mean higher bond rates which in turn will mean lower prices so it might be a combination.
I firmly believe that we haven't had our slump yet because the vast majority of home-owners (who are lower- or middle-income earners) haven't understood that
a) we have two separate property markets - one of the rich and one for everyone else
and
b)most of what they read about property in the local media, both true and false, applies ONLY to the property market for the rich.
When you read property crash blogs from the UK and especially the US you realise how completely strangled our local media is by vested interests. We don't have features on property written by journalists: we have junior hacks phoning John Loos for a quote or else advertorials written by Andrew Golding.
As a result, the overwhelming mass of content concerning property in this country is VI propaganda. A lot of it is quite true: the rich are always impervious to downturns, and I have no doubt that high-end properties are bubbling away as happily as always.
But unfortunately the vast echelon of middle- and low-income earners have drunk the Kool Aid. They've seen Golding's headlines and seen Loos's thumbsucks, and they think it applies to their crappy little shoebox in Midrand or Parow, and they've thought, 'Geez, there's no way I'm giving my place away, I'll hang on until the market recovers and get what it's worth.'
They don't realise that it's OVER for them, and they won't realise until they are hurting so much that they start to open their eyes. What will hurt them? Maybe interest rates. But we do seem to be a very stupid nation when it comes to economic realities.
Newsflash! The property market is already bursting. Like BC says, you can't tell from the mainstream media. You can't tell from Seeff.com or Golding's site...but you can tell from diy sellers on Gumtree. Take a look at how inexpensive many of these properties are compared to their doppelgangers in a commercial property website. I'm guessing the difference is around 20%. I think the margin will only increase as time goes by. These people are desperate and trying to cut out the jerk (prop agent) who got them there in the first place. Actually, I wonder if agents really want such desperate sellers, fearing that such downmarked prices might affect the rest of their inventory.
in the 80s it took 3 years after the end of the recession ended for private insolvencies to peak, and 4 years for company insolvencies to peak in the uk. There is always a lag between "recovery" and the effects being felt by the consumer.
I just bought a house for R 1M. The house was on the market for 8 months. Owner said about 3 years ago he got an offer for R 1.6M but was holding out for more.
When I went to the tranfer attorney, I asked him how business is going. He said 2 years ago they were doing close to 300 transfers a month. Now they doing less that 10% of that.
So what happens when the interval between major market crashes and recessions shrinks to under 4 years? I won't bother posting links but I'm sure you're aware that the current rally has been given low odds for surviving the next few months. Every factor that caused the last crash is still present and in most cases even worse. This recession is just getting warmed up.
forie@ Benny couldnt agree more that the recession is just getting warmed up. it seems more and more are talking of a double dip. that should sort the men from the boys, and the rich from the pretenders. So many I know of are coming to the end of their savings and access bonds. if there is no jump to pre crash levels in the economy they are going to be in real trouble. do you think our grand kids are going to be embarassed by our fanatical saving of plastic packets and washing and storing of old tomato sauce bottles?
IMO Not at all. Reusable glass containers will be in high demand a few years from now. Jars suitable for preserves especially so as they already are in many rural/peri-urban areas in households that "get it".
18 comments:
I would generally also not buy modern - in terms of artisinal workmanship quality and materials build quality.
No value for money.
And I would only go for freestanding/freetitle clay brick properties pre 1988 with separate kitchens old school style.(no clanging of plates and smell of sauerkraut cooking in the lounge thank you :)
When I hear the words "Body corporate and "Levies" I run a mile.
The same with Golf/Lifestyle gated Laagers (I beg your pardon - villages)
Any property I buy, I first calculate seeing myself being able to stay there.
The term "modern" is a bit deceptive. There has barely been any advancement in residential building construction techniques for the last 50-60 years.
We have technological lock-in. Very little about how we construct houses today wouldn't be instantly understood by an ancient roman.
C&P from the IOL website for the Cape Argus. Looks like debt is becoming a problem and I'd bet that it's the big mortgage bonds doing them in...
'Wealthy' consumers begin to default
March 8, 2010
Over-indebtedness and the inability to meet obligations has not been confined to the "less fortunate", a debt counselling agency said on Monday.
Wealthier consumers had also begun to default, Debtbusters said in a statement.
According to the most recent statistics released from rental research agency Tenant Profile Network, one out of five tenants paying rent of R12 000 per month and more did not make their payments in the fourth quarter of 2009.
"This is almost double the reported figure in the third quarter of last year," Debtbusters MD Luke Hirst said.
According to the data, 82 percent of all tenants in the R3 000 to R7 000 per month bracket and 79 percent in the R7 000 to R12 000 month rental bracket all made their rental payments. This showed the current economic climate and over-indebtedness was hitting upper income brackets hardest.
Hirst said this was in line with his view that the middle to upper income brackets had over-extended themselves in the boom years and were now paying the price.
"While the country is officially out of recession, the situation for the average South African consumer does not seem to be looking up," Hirst added.
With 870 000 job losses in 2009 and thousands more taking salary cuts, the capability to pay rent and meet other obligations was not promising.
Hirst added that consumers needed to cut their losses while they were able and not bury their heads in the sand.
"Lifestyle adjustments are essential, and this includes budgeting at all times and making certain sacrifices, which may include moving to less expensive rentals," Hirst said. - Sapa
Or into a motorhome.....
I live in Dbnvl & have noticed a house down ther road has been in the market for +/-12months, He has come down from R1,3m to R850k & still cannot sell.
Friends of mine in a complex (also dbnvl) bought 3 yrs ago for R1,060m, their neighbour (exactly the same type of house) sold last month for R980k.
Yet when a friend had his house evaluated late last year - the estate agent gave him en estimate of R2,6m. The house has been in the market for +/-18 months & the best offer to date has been R1,8m.
Interesting anon
It seems the correct price then is 30% to 35% less than the agents are asking ... and 7% lower than they were 3 years ago.
The secret crash that no one wants to admit.
CJ I think the reason why people aren't talking about a crash is because circumstances aren't as dire as they were in the USA when their market crashed. What I mean is, there aren't several million people facing ARM loans where the repayment spikes after a year or two - forcing the homeowner into a "must-sell" situation.
But yes, the fact is Cape prices are much lower now in terms of supply & demand, but at the same time, not that many people must sell. That is helping to keep the bottom from falling out from the market.
My "guestimate" is that current prices are at about the low water mark and, instead of prices falling further (and faster) like we saw in the USA, there will be several years of flat prices. When you factor in inflation and the time value of money, the prices will eventually become more affordable.
Based on the above, a lot of potential buyers will wait and wait because they are afraid of buying too soon in a buyers market. Will low demand, it's not likely that we will see much price growth for the next 3 to 5 years in most areas. Yes foreign buyers might still snap up property on the Atlantic seaboard but that will be the exception to the rule...
Negative, you idiot. Prices are falling now and falling fast. The thing that's keeping the bottom from falling out is the World Cup. Everyone is trying to hang onto that second and third property hoping to rent it out or sell it for some exorbitant amount. Saffers finances are spread too thin. They're using savings to keep their heads above water...treading treading, hoping things will pick up. But, they won't. There will be a huge dump a few months after the world cup. It will be a price slashing race to sell these places and hopefully not foreclose on their primary residence. But there will be no bailout my white friends :(
Negative, you idiot. Prices are falling now and falling fast. The thing that's keeping the bottom from falling out is the World Cup. Everyone is trying to hang onto that second and third property hoping to rent it out or sell it for some exorbitant amount. Saffers finances are spread too thin. They're using savings to keep their heads above water...treading treading, hoping things will pick up. But, they won't. There will be a huge dump a few months after the world cup. It will be a price slashing race to sell these places and hopefully not foreclose on their primary residence. But there will be no bailout my white friends :(
At 6% inflation you need 15 years of flat house prices to give us the 55% to 60% real drop that the graphs show we need.
So we either need higher inflation or lower house prices to speed the process up. Higher inflation will mean higher bond rates which in turn will mean lower prices so it might be a combination.
CJ
You will see a huge leap in inflation in the next couple of months anyway. The electricity inflation spike is being undervalued I think.
My 2 cents worth:
I firmly believe that we haven't had our slump yet because the vast majority of home-owners (who are lower- or middle-income earners) haven't understood that
a) we have two separate property markets - one of the rich and one for everyone else
and
b)most of what they read about property in the local media, both true and false, applies ONLY to the property market for the rich.
When you read property crash blogs from the UK and especially the US you realise how completely strangled our local media is by vested interests. We don't have features on property written by journalists: we have junior hacks phoning John Loos for a quote or else advertorials written by Andrew Golding.
As a result, the overwhelming mass of content concerning property in this country is VI propaganda. A lot of it is quite true: the rich are always impervious to downturns, and I have no doubt that high-end properties are bubbling away as happily as always.
But unfortunately the vast echelon of middle- and low-income earners have drunk the Kool Aid. They've seen Golding's headlines and seen Loos's thumbsucks, and they think it applies to their crappy little shoebox in Midrand or Parow, and they've thought, 'Geez, there's no way I'm giving my place away, I'll hang on until the market recovers and get what it's worth.'
They don't realise that it's OVER for them, and they won't realise until they are hurting so much that they start to open their eyes. What will hurt them? Maybe interest rates. But we do seem to be a very stupid nation when it comes to economic realities.
Newsflash! The property market is already bursting. Like BC says, you can't tell from the mainstream media. You can't tell from Seeff.com or Golding's site...but you can tell from diy sellers on Gumtree. Take a look at how inexpensive many of these properties are compared to their doppelgangers in a commercial property website. I'm guessing the difference is around 20%. I think the margin will only increase as time goes by. These people are desperate and trying to cut out the jerk (prop agent) who got them there in the first place. Actually, I wonder if agents really want such desperate sellers, fearing that such downmarked prices might affect the rest of their inventory.
in the 80s it took 3 years after the end of the recession ended for private insolvencies to peak, and 4 years for company insolvencies to peak in the uk. There is always a lag between "recovery" and the effects being felt by the consumer.
HI
I just bought a house for R 1M. The house was on the market for 8 months. Owner said about 3 years ago he got an offer for R 1.6M but was holding out for more.
When I went to the tranfer attorney, I asked him how business is going. He said 2 years ago they were doing close to 300 transfers a month. Now they doing less that 10% of that.
Fireman
@ bbflames
So what happens when the interval between major market crashes and recessions shrinks to under 4 years?
I won't bother posting links but I'm sure you're aware that the current rally has been given low odds for surviving the next few months. Every factor that caused the last crash is still present and in most cases even worse.
This recession is just getting warmed up.
forie@ Benny
couldnt agree more that the recession is just getting warmed up. it seems more and more are talking of a double dip. that should sort the men from the boys, and the rich from the pretenders.
So many I know of are coming to the end of their savings and access bonds. if there is no jump to pre crash levels in the economy they are going to be in real trouble.
do you think our grand kids are going to be embarassed by our fanatical saving of plastic packets and washing and storing of old tomato sauce bottles?
IMO Not at all. Reusable glass containers will be in high demand a few years from now. Jars suitable for preserves especially so as they already are in many rural/peri-urban areas in households that "get it".
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