Frightening news for South African property owners?

Question

http://www.busrep.co.za/index.php?fArticleId=4438497

To the South Africans owning their own property or properties, how will this affect you personally and are you prepared for an estimated/predicted 40% reduction in your net capital worth?

For me personally, this would represent disaster, I have already had my house on the market since December of last year and have already dramatically dropped my selling price in the hopes of attracting a buyer so as to allow me to finally make final arrangements to leave for Australia, the market is beyond dead and I fear a further 40% reduction will cost me not only thousands of Rands but precious time and further unwanted frustration......

Ridiculous prediction or possible reality?

Answer 1

This must sound ridiculous to you but I welcome it ! Your situation is different . Even if it ends up at only 25 % I stand to loose 1.4milion but I want to relocate in SA .I need to purchase Commercial propperty that will give me a good passive income as I don't  belong to a pension scheme . That means I will be spending less to accuire such propperty and I'll be saving on the rediculusly high rates and taxes !

I heard on the radio yesterday that ABSA bank now average the average middleclass bond at R960 000 ! That means the bond repayment is about R9000 p\m ! Where do I stand now ? POOR !  How on earth will the average man on the street be able to buy a house with the prices so artificialy blowen up ? It is time that some kind of control is taken now .

Sorry to disagree with you on this one ,but I am staying in SA !

Answer 2

This report contradicts Mr Giffin's statement a few days ago.

According to Giffin (2 days ago) he instructed his agents to urge their clients to drop by 25% (not that this is any better).

Al this news is disastrous to all of us and the people in the know predict it aint getting better for a long time.

Answer 3

I am so glad to hear this

Sorry for you other guys

But I am renting a house which is in the market the owner told me that i can keep on renting the place but he is going to keep it in the market and it is a beautiful place.

So this means i will have a roof over my head for a while longer

Answer 4

Eek.....very scary especially for the people that were caught in the wave of the property boom 2 - 3 years ago, bought houses at ridiculously high prices and now sit with houses that they cannot sell. I always take the actual building costs, cost of the plot, garden, pool etc. in account before I buy a house to make sure I do not get ripped off.......I can believe it, I really can but I think greed also had to do a lot with it and unscrupulous estate agents pushing the prices up and inflating the market. Good news for 1st time buyers.

Answer 5

Luckily I bought most of my properties during 2002 and 2003, therefore I will be able to handle even a 50% reduction without loosing out on Investment.

Except for my own house, I rent out all the other properties. The Rental Market is starting to boom again and the income is enough to cover the outstanding bonds.

Cashflow wise i'm actually a bit better off, but on the balance sheet I'm screwed.

Answer 6

This is not exclusive to SA, in the UK house prices in my area have dropped by four to five thousand pounds over the last couple of months, major builders will give you a ten thousand discount on a new house and still people are not buying. Repossessions are at the highest level since the nineties petrol prices are going through the roof and to top it off if you should want to buy a house you will need a ten to fifteen percent deposit, pretty much impossible for a lot of first time buyers.

Sorry couldn't resist, you forgot to block me in this reincarnation bully boy.