I have followed your blog on and off for over a year while trying to buy a house (to live not an investment) and am sad to see that it seems to have died out now.
Perhaps if you are still posting you could give some enlightening comment on why it is that property prices in Claremont, Newlands, Kenilworth etc (the nicer parts that is) are just not dropping. I have been trying to buy for over 2 years now and the prices are just not really budging. Getting below the 3 mil mark is nearly impossible!
@fdm - Not sure if you just being condecending. Either way in my honest opinion I believe the bulls and the bears were both right at the end of the day.
Pre-boom property in SA was cheap, dirt cheap. There were times where people were hoofing up houses in those suburbs for nothing, and the catalyst was the realization that the Gov wasn't too bad, and the banks were throwing money at people. That being said, the NCA and *relative* credibility of buyers in SA compared to the sub-primers in the States meant that we didn't, and won't see a huge crash in the market. Our situation is just different, so comparing us to the US or Oz is silly. The hard and fast reality is that the 'correction' the bears were looking for (and some still are) actually already happend.
Property in SA, is for the most part correctly priced, perhaps a smitten overpriced here and there as some owners cannot understand why their's hasn't increased 30% annually.
On a side note, I personally don't believe in the great recession of 2008. I believe that we are not in recession but rather in 'correction' of mass lending that occured in the past. Business hasn't slowed due to recession but rather that it's time to pay the piper for lending tomorrows money. The global economy was (and still is) running off money that does not exist, and sometime it needs to be corrected. I bring this up because it has direct impact on interest rates in SA. I don't feel we will see the 18%+ interest rates we saw in the past for a very very long time (the next cycle) so for the most part, SA consumers and property owners will remain liquid. There will be no major crash fueled by inflation driven interest rates.
The reality fdm, is that those suburbs you mentioned are now exclusive due to their position to the CBD and the fact that it's just a nice place to be. You will sadly have to do what the rest of us do, and buy in Belville or Tableview. You will be waiting for a very long time to score a bargain there. If you wait too long, you might find that you are priced out of the Pinelands / Durbanville market too.
I am not sure what about my post seemed condescending to you? However, thanks for your analysis of the CT property scene and the recommendation of where I should buy. You may yet be right that our prices were too low and have just adjusted to their rightful place now. No crash to come.
However, I did not compare to US or OZ as you seem to suggest. While CT property has innate value given the beach, mountains etc SA salaries do not even vaguely compare to those abroad - so our affordability to house price ratio is currently quite far off. I took a huge pay cut to come back to SA after 8 years abroad so I know the value of location!
In any case - your opinions, while interesting, go against the general views of CJ and this blog and it was his thoughts that I sought. Essentially - where is this crash he has been predicting for so long? And on a side note - what has happened to his blog. Why the lack of activity?
As to Tableview vs Southern Suburbs - that may just be your personal preference . I have noticed that the Parklands and Tableview areas seem to have suffered the most - the sheriff's auctions are mostly in those areas. So that may be a good investment as you imply. But I am looking to live so no thanks.
3 comments:
Hi CJ,
I have followed your blog on and off for over a year while trying to buy a house (to live not an investment) and am sad to see that it seems to have died out now.
Perhaps if you are still posting you could give some enlightening comment on why it is that property prices in Claremont, Newlands, Kenilworth etc (the nicer parts that is) are just not dropping. I have been trying to buy for over 2 years now and the prices are just not really budging. Getting below the 3 mil mark is nearly impossible!
Thoughts?
@fdm - Not sure if you just being condecending. Either way in my honest opinion I believe the bulls and the bears were both right at the end of the day.
Pre-boom property in SA was cheap, dirt cheap. There were times where people were hoofing up houses in those suburbs for nothing, and the catalyst was the realization that the Gov wasn't too bad, and the banks were throwing money at people. That being said, the NCA and *relative* credibility of buyers in SA compared to the sub-primers in the States meant that we didn't, and won't see a huge crash in the market. Our situation is just different, so comparing us to the US or Oz is silly. The hard and fast reality is that the 'correction' the bears were looking for (and some still are) actually already happend.
Property in SA, is for the most part correctly priced, perhaps a smitten overpriced here and there as some owners cannot understand why their's hasn't increased 30% annually.
On a side note, I personally don't believe in the great recession of 2008. I believe that we are not in recession but rather in 'correction' of mass lending that occured in the past. Business hasn't slowed due to recession but rather that it's time to pay the piper for lending tomorrows money. The global economy was (and still is) running off money that does not exist, and sometime it needs to be corrected. I bring this up because it has direct impact on interest rates in SA. I don't feel we will see the 18%+ interest rates we saw in the past for a very very long time (the next cycle) so for the most part, SA consumers and property owners will remain liquid. There will be no major crash fueled by inflation driven interest rates.
The reality fdm, is that those suburbs you mentioned are now exclusive due to their position to the CBD and the fact that it's just a nice place to be. You will sadly have to do what the rest of us do, and buy in Belville or Tableview. You will be waiting for a very long time to score a bargain there. If you wait too long, you might find that you are priced out of the Pinelands / Durbanville market too.
Hi Sucker Jack.
I am not sure what about my post seemed condescending to you? However, thanks for your analysis of the CT property scene and the recommendation of where I should buy. You may yet be right that our prices were too low and have just adjusted to their rightful place now. No crash to come.
However, I did not compare to US or OZ as you seem to suggest. While CT property has innate value given the beach, mountains etc SA salaries do not even vaguely compare to those abroad - so our affordability to house price ratio is currently quite far off. I took a huge pay cut to come back to SA after 8 years abroad so I know the value of location!
In any case - your opinions, while interesting, go against the general views of CJ and this blog and it was his thoughts that I sought. Essentially - where is this crash he has been predicting for so long? And on a side note - what has happened to his blog. Why the lack of activity?
As to Tableview vs Southern Suburbs - that may just be your personal preference . I have noticed that the Parklands and Tableview areas seem to have suffered the most - the sheriff's auctions are mostly in those areas. So that may be a good investment as you imply.
But I am looking to live so no thanks.
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