Some choice quotes:
The slump has hit investors who bought in the CBD during the property boom and are now being forced to sell their apartments for less than what they paid for them. Some homeowners are losing hundreds of thousands of rand.
This comes as Eurocape, owner of Mandela Rhodes Place and the Taj Hotel, readies itself to release apartments it has held back for years.
...
A Johannesburg resident, who spoke on condition of anonymity, said his studio flat in Mandela Rhodes Place had been on the market for three years.
He bought the property a few years ago for just over R1.1m, R220 000 less than what the original owner paid for it.
"The market is shocking. This property's moved from one high-profile estate agent to the next and it's still not sold," he said. "Now all I want is what I paid for it."
Remax City Bowl estate agent Henry Voss said he has had to slash the prices of a host of apartments in the CBD, with the new buyers paying "considerably less".
...
Another Remax agent, Steven Delit, said many of the new developments in the CBD "didn't live up to the sizzle".
"A lot of them were set up as tourist hotels and the returns have been dreadful.
"Occupancy rates are low across the board right now, and developments like The Icon are not achieving near what buyers were told they would get," he said.
8 comments:
Property slump hit the city centre years ago, this is old news. Those crappy little apartments, most of them viewless and soulless, are a waste of money. They will languish on the market until they drop to fair value which is probably 50% - 60% of their overinflated asking prices.
It would be riveting to see actual stats on those new developments i.e. number actually sold, number for sale, sales prices etc...
The only people making money in the Cape Town CBD are the real estate agents that persuaded greedy buyers / banks to pay R1m for a tiny 50 sq meters apartment and the managing agents that are bleeding the sectional title owners dry with their annual above inflation increase in fees.
The sectional title market is bleeding and guess who is now selling these previously overpriced units?
The very same estate agents!
No US Real Estate Rebound Until 2034
While the housing market will see periods and ebb and flow, it won't rebound until 2034.
Eric De Groot
In his post I could have sworn I was looking at ABSA's annual house price growth graph since the 60's.
Funny that...
Martin Armstrong, the genius that created a computer that could accurately track business cycles around the world and has been incarcerated in the US for the last 7 years on spurious contempt of court charges because he refused to give the powers that be the source code (Google it, an intriguing story), has been handwriting a newsletter from prison and his calculations are that property in the US will blip up in 2014 and then 3 years later plummet to even deeper depths than at present.
This is the same result as the baby boomer formula created by another Maths genius that has had very accurate results in the past that says property is going to slump for 20 years.
Increasingly, it is becoming clear that property, as an investment, won't be a major player for at least a couple more decades.
222 Apartments for sale in the City Bowl on Gumtree = Glut
Well, the debt based system the West subscribes to means that the cogs need to turn. If they are not turning the machine doesn't just sit idle, it falls apart. Bankers know their markets, and if a spur in the market is what's needed - by golly they will make it happen. 2008 recession almost tipped the fragile puppy over the edge but they survived.
I'm willing to bet my rainwater harvesting system or my chiwawa Julius that there is a world of CBD buyers jittering to be let loose. They will be when the banks start their 100% bonds again and give money away. Standard and FNB already are.
Banks have never let a trivial thing like affordability stand in the way of their empire. What makes you think they will start now?
What about the new The Mirage development in De Waterkant, following the signs already 57% sold.
I've heard from those more in the know than me that The Mirage developer has to start building soon or the people who have put down deposits already can walk away. And with only 57% sold I'm pretty sure those who have put down deposits wouldn't mind doing just that.
There's a reason that plot has been empty plot for the past 2 years.
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