So what is happening with house prices at the moment?
As predicted very little. Housing has firmly re-established itself as a place to live rather than to make money off.
Nominal house prices continue to creep upwards as per history dictates in South Africa with nine straight months of month on month growth since Nov 2010.
While CPI continues to stay low, there has been a stem to the tide of the real house price drops for now. House prices actually grew in real terms month on month April, May and June 2011.
But with the clouds of further global slowing gathering, the impact of which crystalised itself out for everyone to see in the form of open lawlessness and theft in the UK riots – we can expect further pressure on prices and growth in the future.
Jobs are expected to fall, interest rates remain stable for now but may move up depending on the repercussions from the US down-grade and rates and general living costs continue to increase.
Tenants are feeling the squeeze with the number of good payers decreasing as per TPN stats recently released.
So the recommendation continues to be focus on portfolio consolidation and deleveraging while keeping an eye on the middle term.
I have never been a profit of doom supporter and therefore say house prices will continue to strengthen. I have seen this in Richards Bay where I operate as an estate agent, thanks for the post! http://www.richardsbayproperties.com
Compared to 1998, SA house prices presently are almost twice as expensive compared to rents and have gone up 250% more than inflation – these figures are according to the latest Economist magazine’s graphs.
I would say that insisting that such overpriced homes will continue to rise in price is in itself being a ‘profit of doom’. What people in this country want is affordable housing. Not over inflated bubble priced housing.
And Estate agents who for years have hyped the prices up in the misguided belief that rising house prices are somehow a good thing, is all part of the problem …
The banks have been keeping house prices stable by not flooding the market with their repossession and slow payer properties. This has kept the market stable but at some point the banks will be forced to recoup costs on these properties and this will cause the market to drop. Most properties currently on the market are overpriced by 10% to 15%, some as high as 25%, unfortunately many sellers are forced into this by the astronomical prices they paid when prices boomed, they are now in trouble and are trying to minimise their losses. The properties which are selling are those which are priced realistically by sellers who realise what is happening in the market. This is evident by looking at open house price valuations versus seller expectations.
I am currently in the market for a house but after having viewed around 50 properties over the last few weeks I am having serious doubts about actually buying right now. As a cash buyer I think I will wait for the bottom to fall out and cash in on the cheap properties.
Amazing how everyone goes on about hyped up housing prices , and yet it’s quite alright to splash out a quick million or so on the latest 4 by 4 – what a joke.I suppose that’s why one sees so many car ads on TV – there are so many suckers out there waiting to get pole hammered by car manufacturers and financiers – Talk about skewed priorities.