Saturday Open Thread: "Prices to Decline" - MoneyWeb

Residential property prices to deteriorate

Housing prices have been coming down in real terms for much of 2011 and this negative growth trend is something that property analysts expect to continue for at least the rest of the year, probably longer.

With investment in residential property more likely to lose the average homeowner money in the near term, Moneyweb asks whether those consumers who have a choice should be opting to rent or to buy.

Saturday Open Thread: Boks Vs. All Blacks Edition

It's the Saturday Open Thread. Go Boks!

Saturday Open Thread

It's the Saturday Open Thread.

Banks Downscaling Home Loan Departments

Banks brace for home loan sales staff retrenchments

Retrenchments are looming in the home loan departments of two of the four major banks, according to Business Report on Thursday.

Chief executive of First National Bank (FNB) Home Loans Jan Kleynhans confirmed that the bank was restructuring its sales department.

"At the moment we have just taken the first steps by advising [about] 90 people who may be affected. FNB Home Loans has nearly 1 000 employees.

Saturday Open Thread: Double Dip Recession?

The markets got killed this week and S&P just downgraded the US bond rating.

Is the double dip recession here?

Rent Vs Buy - Mututal Heights: R1 500 rent on a R1.4m apartment. Crazy pills!

An anonymous user on this post sent us a link to this listing for a 2 bedroomed apartment in Mutual Heights on the market for R 1 395 000. Rates and levies are R2 520/month, transfer costs are approximately R50 000.

And it's tenanted at R4 000/month. Till April 2012. Which means after expenses (but excluding maintenance) you'll be making R1 480/month. As the submitter said "I feel like I am taking crazy pills!". The difference between the rental and the bond is R11 000/month!! You're going to need a whopping 88% downpayment to have positive cashflow!

Do you even need to see the cashflow yield graph?

Down Payment	Monthly Payment	Cash Flow	Annual Income	ROI	Cap. Appr. Required
R0	R12551.18	R-11071.18	R-132854.13		9.52%
R139500	R11296.06	R-9816.06	R-117792.71	-84.44%	8.44%
R279000	R10040.94	R-8560.94	R-102731.30	-36.82%	7.36%
R418500	R8785.82	R-7305.82	R-87669.89	-20.95%	6.28%
R558000	R7530.71	R-6050.71	R-72608.48	-13.01%	5.20%
R697500	R6275.59	R-4795.59	R-57547.06	-8.25%	4.13%
R837000	R5020.47	R-3540.47	R-42485.65	-5.08%	3.05%
R976500	R3765.35	R-2285.35	R-27424.24	-2.81%	1.97%
R1116000	R2510.24	R-1030.24	R-12362.83	-1.11%	0.89%
R1255500	R1255.12	R224.88	R2698.59	0.21%	-0.19%
R1395000	R-0.00	R1480.00	R17760.00	1.27%	-1.27%

Saturday Open Thread

It's the Saturday Open Thread

IOL: Property Slump Hits City Centre

Property slump hits Cape Town city centre

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.

Sunday Open Thread

It's the Sunday Open Thread

Property Developer Auctioning Own Penthouse

Barry Levin, well known property developer, is auctioning off his massive (1400m2) penthouse on top of Two Oceans in Mouille Point tomorrow (Friday 22nd July). The reserve price is rumoured to be north of R40 million.

Why is such a property being sold on relatively short notice (I first heard of it 2 weeks ago) via auction?

Saturday Open Thread

It's the (barely) Saturday Open Thread.

High Rise And High Levies: R70 000/year Incinerated

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!

Saturday Open Thread: FNB - 'It's not getting better'

Welcome to the Saturday Open Thread. This weeks topic starter from FNB:

With houses turning in sub-inflation growth, sellers should look at pricing their houses more realistically, while buyers are becoming increasingly more professional in their buying decisions.

Current high debt to disposable income levels place owners under pressure to service their mortgage obligations. The sector will remain stressed and the need to downscale will continue, especially where we have seen income and job losses.

Ballinrobe: Still Selling or Buyers Bailing?

Reader JP writes:

It's been a year since it's been completed but the Ballinrobe is still trying to sell all it's units. Either that or the people who bought off plan are bailing. Which is worse?

Saturday Open Thread

I'm drowning my sorrows after the rugby. Today's topic: How far are you prepared to commute every day?

Is The Grass Always Greener?

I received the following email:

This is the time to get out of property investment in South Africa, rather invest in Australia where there is a continious growth in property prices.

House Price Growh March 2010 - March 2011
Sydney: 0.8
Melbourne: -1.1
Brisbane: -3.6
Adelaide: 0.9
Perth: -3.2
Hobart: 0.6
Darwin: 0.5
Canberra: 1.1

Not exactly scintillating growth is it? The 3 quarterly growth (Dec 2010 - Mar 2010) is decidedly worse.

Saturday Open Thread: Speculators Offloading?

Have you seen evidence of this?

Across SA, investors are moving distressed homes through the system far faster than lenders, according to Auction Alliance CEO Rael Levitt.

In areas such as Cape Town, Pretoria and Johannesburg's West Rand and East Rand, sale-in-execution speculators are offloading properties faster than ever.

Rate Hikes Sooner Rather Than Later?

Rate increases loom as inflation quickens

South African consumer inflation accelerated more than expected in May, boosting chances the Reserve Bank might start lifting interest rates before the end of the year rather than early in 2012.

Government bond yields retreated, with the yield on the four-year issue rising to 7.49 percent from 7.445 percent prior to the release of the CPI numbers at 0800 GMT.

May inflation came in at 4.6 percent year-on-year from 4.2 percent in April, Statistics South Africa said, and also quickened to 0.5 percent month-on-month from 0.3 percent, the main drivers being accelerating food and fuel prices.

Saturday Open Thread

It's the Saturday Open Thread. This week: With the market still stagnating which new developments (under construction, finished or yet to be started) are heading for the wall?

Saturday Open Thread

I'm at Newlands and onto my third lager. Chat amongst yourselves.