Here's a 3 bed apartment on sale in Mutual Heights for a hair under R3 million. It's pretty big (244 m2) but the levies and rates would make you think it was even bigger.If you buy this place be prepared to pay rates of R1 600 and levies of R4 376 for a combined outlay of R5 976. That's over R70 000 a year that disappears into the air. You'll need at least 2% capital appreciation just to break even on that!
14 comments:
We get the point. Properties are expensive. NOW PLEASE MOVE ON. This blog has become pointless and tedious as we are now in the crash phase but nobody has any actual stats to show what's going on. Either start producing month-by-month indexes of reductions, or pull the plug.
I know a oke who sells leg cream to high-end salons and makes over R100k per month.
He could afford those rates and levies and he asked me to ask you "So what is the problem?"
@ second anon
I get the humour but for those that don't:
The problem is that there are far too few people that earn high salaries and are capable of affording properties priced this high. And of those that do a fair proportion are switched on enough to realise they can get better bang for their buck elsewhere.
L.S.
Here you go anon 1 - a few more percent to fall in the real price to get us to where the plummet starts and the "fear" stage begins ...
http://housepricesouthafrica.files.wordpress.com/2011/03/sa-real-house-prices-v-jp-rodrigues-bubble1.png
OK - that didn't work - lets try a tiny url
http://tinyurl.com/6hr7ewq
@ anon 2...
The problem is....even if you earn 100K per month, by paying those exorbitant rates and levies, you're still being taken for a massive ride.
You're not getting value for your money,you're just 100K fool.
So the saying is still very valid " A fool and his money are soon parted".
A fool eh? Maybe. I believe it's all depends on what's important to those living there. Some like upmarket and exclusivity. The carpeted lifts and chrome security pill-box appeal to some. Some people live in the CBD because of the proximity to work, some for the social benefits. You will get better bang for your buck in Brackenfell though. I know a guy that earns the average salary, but has a delicate palate when it comes to Red Wine. He will not buy a bottle below R200 and certainly not one below R300 in a restaurant. A 5L pap-sak is more bang for the buck.
Hi CJ, no long no contribute (me, not you!) Great graph...BUT! The picture is starting to get horribly messed up by the persistently high prices. Instead of plummeting nicely as per graph number 2, prices are sagging in tiny increments.
In my view this is how our bust will differ from the US's. The US plunged into double dip, but we'll rely on inflation to chip away at real prices. Either way we'll get the 30% or 40% falls, but it will be a bust-by-stealth, I reckon.
Meanwhile mates of mine have just put in an offer on a huge place in University Estate - beautiful 1930s bungalow, 400m2, for R2,4m, with double garage and pool. Or, if you're retarded, you could spend R2.4m on 80m2 at Wembley Square...
Fun times.
Hi Bean
A few more percentage points down and we pass the start point of the bull trap - that's when the plummet usually happens.
I am not sure inflation is going to have a chance to get higher any time soon because if interest rates go up, the rand strengthens, driving down import prices and helping inflation to drop again.
So the 50% real fall will have to come mainly from nominal drops rather than inflation. We still need to enter the "fear" stage - I suspect that if the momentum for price falls increases, the panic for the exit will start and could well be the driver.
I also think that the penny might be dropping amongst the estate agents that the longer you fight this and discourage the falls, the longer the crash will drag on, which means the longer they will continue to have reduced sales volumes.
They actually need the crash to happen as soon as possible, just as much as the first time buyers do.
The rates on rental properties will soon be going up as well. There's a new property rates act making it's way through parliament that mandates all non-primary residence properties pay commercial rates.
If you're renting and happy where you are I would suggest locking in a new lease ASAP before the landlord decides to pass the increased rates costs as a rental increase.
It will interesting to find out from the Trustees of the (newish) Mutual Heights complex what exactly the owners are getting for the very high levies. am told that the levies excluding electricity & water & rates & parking are over R20 per square meters.(ie over R1,000 per month for a tiny 50sq meter space).
What is really frightening is that the complex are just over 5 years old.
The future looks very expensive in deed.
@Mutual Heights Tenant
The "complex" is located in a building that was completed in 1940
.
Therein lies your answer as to the high levies - it's a very old structure that requires far more maintenance than a new building.
According to a recent survey of 11 comparable residential sectional schemes in or near the Cape Town CBD, Mutual Heights was 12% BELOW THE AVERAGE, seventh from the top of the list and fifth from the bottom. And it has a healthy reserve fund, it is being maintained with great care and pride, and there are no plans at this time for special levies.
Get real, people ... you have to see the bigger picture. I'm with Anonymous (9:47am) - properties are expensive. Sectional title properties are extra expensive because they relieve the owner of more than half of the burden of maintenance.
Can we please move on?
@Mutual Heights Tenant:
If you want to see the history and quality of this extraordinary building, go check:
http://en.wikipedia.org/wiki/Mutual_Building
IF you do not value these things, you have choices.
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