House prices

[Frankie]

I could not understand the jist of most of that but the first line alone was enough to get me rolling my eyes.... I should really take DJKs advice and not even bother commenting in these financial related threads.....

No, there's no reason to stop offering your advice and comments here, just because of some participants talk from their ring-pieces.

 

[Frankie]

I also heard that by the 2nd quarter of next year, house prices will start rising again.

That would be pleasing to see for those that have invested in property, but I'm not that optimistic. I think we'll only see meaningful increases in 1 ~ 2 years.

I don't think it's any more difficult for first time buyers now, than it was when I was starting out.

 

[LancelotSA]

No, there's no reason to stop offering your advice and comments here, just because of some participants talk from their ring-pieces.

Thank you for the subtle and quiet correction of my spelling error. I missed that in my haste to post! And thank you for the post as a whole.

 

[stoke]

The "second wave" theory (part deux) that werner is talking about involves the 2 year discount that was employed by American banks to get people who could not actually afford the mortgate to take them.

The banks let people open the mortgage at a discounted rate for 2 years. Now ... these are apparently going to be the next defaulters, causing the next wave of US bank instability.

Keep this in the back of your mind.

Now, how exactly this is going to affect us is completely undefined, but, seriously, if you are buying a house ... try to buy one that you can actually afford .. like as in you can pay 2 times the required payment every month.

 

[Jabberwocky]

Financial jargon aside, i think house prices will be what they should be when a middle income 1st time buyer/s can afford a middle class home.
but again, thats just my opinion, and i`m not an expert on the matter.

 

[boramk]

To get back to your query Boram

Remember house prices have still been growing up until now in nominal terms. It is only when you factor in inflation that growth in real terms has been negative. A drop in interest rates will affect this as with the same monthly payments people will be able to afford a more expensive property.

Thats bad to hear

Well I'm hoping they start to pick up soon, got a R1.3mil for R1mil .. Hopefully with the fuel prices and what not, real term figures will increase as well...

 

[Milano]

House prices to drop further
2008/08/07

Nominal house price growth is forecast to decline in real terms this year and next year, says Absa.

On the back of current and expected economic conditions over the next 12 months, nominal price growth across all three categories of housing in the middle segment of the market is forecast to be markedly lower for the full year and in 2009 compared with the past number of years, with prices set to decline in real terms this year and next year.

That's according to the country's biggest mortgage lender, Absa. It said on Thursday that this will be the first annual real decline in house prices since 1999.

"Economic conditions are expected to improve in the second half of 2009, to a large extent as a result of declining inflation and interest rates. On the back of these expectations, the residential property market is set to recover gradually from late next year with the household sector experiencing less financial pressure.

"Nominal house price growth is forecast to rise to levels of above 10% from 2010, with real price growth projected to turn positive again in 2010," the banking group said.

http://www.property24.com/Property24/Hub/ShowSectionArticles_Full.aspx?articleid=8070

 

[Ou grote]

...
Now, how exactly this is going to affect us is completely undefined, but, seriously, if you are buying a house ... try to buy one that you can actually afford .. like as in you can pay 2 times the required payment every month.

That's a bit high

Another way:
If your interest rate is say 15% work out the payment, then change the interest rate to say 20% and see if u can still afford it.
That should get u past the first 2 years of payments.

And always try to pay extra every month. (flexi bond)
Actually don't "try", U have to do that.

 

[Pyro]

Actually work with your interest rate, but aim for something you could pay off in 10 years, instead of 20.

Interest rates should be dropping by something like 2% over the next year, which could make the market more active, and push prices up again.