Saturday Open Thread - IRT Effect?

It's the Saturday open thread. This week: 'Will the IRT (Integrated Rapid Transport) System currently being rolled out affect the property markets it services?'

Saturday Open Thread

It's the Saturday Open Thread! This weeks topic: Gentrification: Where is it happening? Good or bad?

High Rise And High Levies: R60 000/year Evaporated

Here's a nice looking 210m2 loft in Cape Town on the market for R2.2m. Now on a R/m2 basis that isn't too bad (+- R10 000/m2), although it only has 1 bedroom in that 210m2 space...

What is bad though is the massive R5 100/month combined rates and levies (Rates: R2500, Levies: R2600). That's over R60 000/year that you will never see again.

Over 3% in capital appreciation is required every year just to make back the money spent on rates and levies.

The Orangerie: If You Enjoy Losing R18 000/month

Reader DM sent us a link to a 2 bed apartment for sale at The Orangerie (how we missed you!). Here's the text of the ad:

The best of the best
What better place to live! tenanted until 31st December 2010 @ R8,000 p/m.

And the asking price? Only R2 850 000. Which means a 100% bond would require a monthly bond payment of R25 642/month.

So you can rent for R8 000/month or pay R25 642/month to own. To put that in perspective to get your bond payment down to the same level as the rent you would need to a down payment of around R2 million.

Anyway if you're buying for investment this is a terrible option (unless you enjoy losing R18 000/month), you don't need me to tell you that but here's the yield/cashflow graph anyway:

Down Payment	Monthly Payment	Cash Flow	Annual Income	ROI	Cap. Appr. Required
R0	R25642.19	R-17642.19	R-211706.28		7.43%
R285000	R23077.97	R-15077.97	R-180935.65	-63.49%	6.35%
R570000	R20513.75	R-12513.75	R-150165.02	-26.34%	5.27%
R855000	R17949.53	R-9949.53	R-119394.39	-13.96%	4.19%
R1140000	R15385.31	R-7385.31	R-88623.77	-7.77%	3.11%
R1425000	R12821.09	R-4821.09	R-57853.14	-4.06%	2.03%
R1710000	R10256.88	R-2256.88	R-27082.51	-1.58%	0.95%
R1995000	R7692.66	R307.34	R3688.12	0.18%	-0.13%
R2280000	R5128.44	R2871.56	R34458.74	1.51%	-1.21%
R2565000	R2564.22	R5435.78	R65229.37	2.54%	-2.29%
R2850000	R-0.00	R8000.00	R96000.00	3.37%	-3.37%

Saturday Open Thread

It's the Saturday Open Thread.

Saturday Open Thread

It's Saturday! Go Stormers!

High Rise And High Levies

Here's a 104m2 2 bed apartment in the CBD on the market for a hair under R2m. Now you can probably negotiate the price down but what you can't negotiate down is the rates of R893/month and levies of R3285/month.

That's an eye watering R4 178/month! Over R50 000/year! More than 2.5% of the current asking value of the property evaporated every year.

Lord help you if they ever need to put in a special levy for urgent repairs.

Saturday Open Thread

It's the Saturday Open Thread: Anything Goes Edition

Saturday Open Thread - Winter's Coming

It's the Saturday open thread. Now that winter is creeping into Cape Town, what role do the seasons play in the ability to sell a house?

Sunday Times Still Claims Sol Kerzner Staged One&Only Sale

Back in June 2009 I reported that despite claiming 1 of the 3 penthouses had been sold at the One&Only V&A Waterfront for a record breaking R110 million, all three were seemingly still on sale.

The Sunday Times then reported in August of that year that in fact the sale had seemingly been staged by Sol Kerzner to himself. This was vigorously denied by the agents involved (Seeff Atlantic Seaboard) with many a disapproving harumph.

On Sunday The Sunday Times ran an article about a property under construction that will supposedly eclipse that record price and they started that article with:

Hotel magnate Sol Kerzner, who co-owns the country's most expensive home, is about to lose his bragging rights.

An double-storey mansion still under construction is on the market for R110-million - and the developers are entertaining offers from five international jet-set celebrities.

Kerzner bought his 800m² duplex apartment, which runs across the top two floors of the One&Only hotel in Cape Town's V&A Waterfront, for a record R109-million in 2008.

So they seem to be confidently stating that Kerzner was in fact the buyer, or at least the co-buyer. I'll consider that case closed.

Saturday Open Thread

It's the saturday open thread. This weeks topic - "Long Term Apartment Living - Yea or Nay?"

Not Selling? Drop The Price 1.5%!

Just got this in my email for this apartment:

Price Reduced by R 15 000 to R 935 000

I'm sure that 1.57% drop in asking price will really change peoples minds....

Update: And another - "Price Reduced by R 14 000 to R 985 000"

What's that.. 1.4% off? Be still my beating heart!

Sunday Open Thread

Just woke up from my Stormers-loss induced hangover. This is the Sunday Open Thread...

Ugliest House in Cape Town Still For Sale - Less R5 Million

The ugliest house in Cape Town is still for sale at R9 995 000. That's a R4 550 000 drop in price from R14 500 000 asking in April 2010. With that saved five bar you can buy yourself some taste.

PIC Syndications Looking Wobbly

After the pawpaw hit the fan with Sharemax it now looks like PIC Syndications is going the same way:

Property mogul Nic Georgiou has walked away from "guarantees" he supposedly made to thousands of investors in PIC Syndications.

For some time PIC Syndications, led by its apparent owner and CEO, Rikus Myburgh, and joint MDs, Ben van der Linde and Morkel Steyn, has been selling shares to investors with the assurance that their income and capital were "guaranteed".

Realestateweb and others have questioned this supposed guarantee, which was backed by Georgiou and his associated entities. We noted that while Georgiou appeared to be a wealthy businessman, his financial affairs are not open to public scrutiny. It was simply impossible for investors or their financial advisers to determine his net wealth - for all they knew, Georgiou could be mired in debt.

Saturday Open Thread

It's the Saturday Open Thread. This weeks topic: If you are buying now, what discount off the asking price should you be aiming for?

Sunday Open Thread

Too much sport, too many beers, too little time to post an open thread.

Saturday Open Thread - Stormers Vs Bulls

It's the Saturday Open thread. Here We Go Stormers!

Saturday Open Thread: SA Vs Inida Edition

It's the Saturday Open thread, but instead you should really be watching the cricket.

Rent Vs Buy: City Bowl - R1 000 000 Invested = 0% Return

Here's a 3 bedroomed 119m2 apartment in the City Bowl on sale for R2 100 000. That means with a 100% bond you can expect to pay R18 884/month.

It also rents for R9 500/month which also means you can expect to lose at least R9 394/month covering the difference between the rent and the bond payment. Take into account rates, levies and maintenance and you're probably losing well over R10 000 a month.

Let's take a look at the yield and payment graph and table:

Down Payment	Monthly Payment	Cash Flow	Annual Income	ROI	Cap. Appr. Required
R0	R18894.25	R-9394.25	R-112730.94		5.37%
R210000	R17004.82	R-7504.82	R-90057.85	-42.88%	4.29%
R420000	R15115.40	R-5615.40	R-67384.75	-16.04%	3.21%
R630000	R13225.97	R-3725.97	R-44711.66	-7.10%	2.13%
R840000	R11336.55	R-1836.55	R-22038.56	-2.62%	1.05%
R1050000	R9447.12	R52.88	R634.53	0.06%	-0.03%
R1260000	R7557.70	R1942.30	R23307.62	1.85%	-1.11%
R1470000	R5668.27	R3831.73	R45980.72	3.13%	-2.19%
R1680000	R3778.85	R5721.15	R68653.81	4.09%	-3.27%
R1890000	R1889.42	R7610.58	R91326.91	4.83%	-4.35%
R2100000	R-0.00	R9500.00	R114000.00	5.43%	-5.43%

Unless you put down at least a cool million you aren't breaking even on cash flow and paying in cash gets you 5.43% ROI. And that's before expenses are taken into account.