Houses...where does one begin?

[Hosehead]

IMHO its not the time to buy quite just yet. Even though sales activity is picking up. The prices have yet to fall quite a bit further. (in the Cape) there are very few affordable rentals (say between 4000-15,000) but there is PLENTY of rental stock in the over 30K price bracket. People will realise that they can't get tenants in that range but still have to pay the bonds but they will only do it for so long and the higher rentals will drop also the Government is hammering on legislation that the no foreigners be allowed to buy so if that comes to fruitition prices will freefall further to realistic levels.

 

[Suspect99]

As a matter of interest, what sort of interest rates are 1st time buyers getting at the moment?

I got 8.5% on a 95% bond. First time buyer at 23 years old

 

[Other Pineapple Smurf]

IMHO its not the time to buy quite just yet. Even though sales activity is picking up. The prices have yet to fall quite a bit further. (in the Cape) there are very few affordable rentals (say between 4000-15,000) but there is PLENTY of rental stock in the over 30K price bracket. People will realise that they can't get tenants in that range but still have to pay the bonds but they will only do it for so long and the higher rentals will drop also the Government is hammering on legislation that the no foreigners be allowed to buy so if that comes to fruitition prices will freefall further to realistic levels.

Depends on where in the market your buying but I still see > R1 million properties going to come down quiet a bit. Too many optimistic sellers. I've seen a lot of sellers inflate their prices with up to 30% and their properties are not moving.

In the market we bought its either rock bottom or it has very little room to move so risk is minimal. On the entry level market, I'm seeing prices remain static. The few overpriced properties here are just stubborn sellers who do not want to admit the market is down.

In two years time if you have not bought property yet, or not already in the process, then your going to struggle.

 

[Other Pineapple Smurf]

I got 8.5% on a 95% bond. First time buyer at 23 years old

When? Problem is banks change their policy every three months. Earlier this year first time buyers where getting 104%, now I'm lucky to have gotten 90% with 8.6% (know of some professionals who have been offered 60%). And in three months time it will different again

 

[ToxicBunny]

^^^

This much I experienced, drove me dilly..

I put an offer on one house.. got a bond offer from all 4 banks at 100% from each one.... house purchase didn't happen..

Spent the next 2 months hunting, found a new place, put in an offer at EXACTLY the same value (and my salary had increased in the meantime)... got 4 completely different offers from the banks (75% - 95%). Went to Nedbank and showed them the previous offer, told them to match it or I would take all my business elsewhere.. bit of fighting but eventually they came through with a 100% offer exactly as before.

 

[Hosehead]

In two years time if you have not bought property yet, or not already in the process, then your going to struggle.

We don't have crystal ball. Anything could happen in 2 years. The banks put the tit clamps on for the past three years and refused credit now they're wanting to loosen their criteria again but nobody should be freaking out about not being a homeowner at this point unless one is in a rock bottom priced area. You don't want to saddle yourself with any more debt than necessary.Play the banks off against each other. They're all scum anyway.

 

[Leo876]

Wow I did not expect to get this much feedback but it's really appreciated.

 

[S1ght]

As a matter of interest, what sort of interest rates are 1st time buyers getting at the moment?

I got 8.15%. First time buyer at 24.

 

[Other Pineapple Smurf]

We don't have crystal ball. Anything could happen in 2 years. The banks put the tit clamps on for the past three years and refused credit now they're wanting to loosen their criteria again but nobody should be freaking out about not being a homeowner at this point unless one is in a rock bottom priced area. You don't want to saddle yourself with any more debt than necessary.

Agree 100% we don't have a crystal ball and everything is speculation.

I realised also that I failed to mention that one needs to consider the number of rooms in a house/flat when speculating about real present and future value. All my comments where in the mindset of 3 bedroom places as we where looking at those.

Had that discussion over the weekend and we where speculating that the 2 bedroom market is still on a nose dive as its too small for a family and most starting out need to rely on the rental income of the 2nd room. All these units I saw where still overpriced and stay on the market for a long time.

Play the banks off against each other. They're all scum anyway.

Thats why I used OOBA and SA Homeloans - worked in my favour as we went from Prime + 2.00% to Prime + 0.10%

 

[Suspect99]

When? Problem is banks change their policy every three months. Earlier this year first time buyers where getting 104%, now I'm lucky to have gotten 90% with 8.6% (know of some professionals who have been offered 60%). And in three months time it will different again

This was last year December

 

[Paul_S]

Currently the housing market is overpriced and ready for tough times as it readjusts. If you ask people in investment/market analysis they will tell you this is coming.. but does this mean you shouldn't buy?

I'm not sure I agree.
In high value properties it may be the case but below the R1 million mark I don't think there is much over pricing happening.
The cost of building is way more than purchasing existing property and this will keep pressure on the housing prices.
For example my house has a market value of around R 900,000 but it would cost me at least R1.2 million to build from scratch excluding the purchase of the land.

I think the pressure on housing prices has a lot more to do with lending criteria and people's shrinking disposable incomes rather than over pricing.

 

[ToxicBunny]

That I would agree with...

If anything, the readjustment has been going on for a few years as prices have been relatively stagnant... there are probably a few more years of stagnant real growth though.