Letter to Tito

janp0s said:
I drived a piece of **** for 8 years to be able to afford my house... I didnt have any furniture for 2 years..

Only on my 3rd year did I buy a tv and other luxury items.

Its called postponing the intimidate gratification factor.

And look now my house is nearly paid off
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Well done here have a medal,

so now what would have happened if the rate sky rocketed in the first few years?
 
Hi Gavin
Sry, my question was sincere, no needle.
Not an economist either, just calling it the way I see it as you are doing, from differing positions though and am interested in your, and other, views.
:)

I think any action that provides relief to the people in the market at the moment will ultimately have a negative effect on those wanting to enter.

I have been watching the property market for some time and the slowdown in growth, for me and others without houses, is a really good thing.

I don't understand what factors would influence the property rate if it was separate only to say that the only conceivable reason why people want it separate is because they feel the increasing nominal interest rate trend is one that is set to continue for a while to come yet and believe that if the bond rate was separate it would not increase as much!

Until someone can convince me otherwise, this is going to hurt the havenots more, and benefit the rich and the ones feeling the pressure on their existing bond/s
 
GavinMannion said:
The average starting salary for a Network Engineer or Accountant is what R8 000 gross?
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It was and still is normal to have to work a while, and save, before buying one's first house. So the "starting salary" does not come into it.

Everyone just thinks they are entitled to their parents' standard of living from day 1.
 
I know house prices are expensive at the moment, but look at the rest of the world... In london most professionals are renting because they cant afford to buy

And SA is heading the same direction.

I feel sorry for the guys who cant afford a house, but there are other means... built up some capital by playing with new developments, etc....
 
janp0s said:
I know house prices are expensive at the moment, but look at the rest of the world... In london most professionals are renting because they cant afford to buy

And SA is heading the same direction.

I feel sorry for the guys who cant afford a house, but there are other means... built up some capital by playing with new developments, etc....
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Renting or, even more frequently these days, still living with their folks into their 30s until they can afford to buy!
 
bwana said:
Renting or, even more frequently these days, still living with their folks into their 30s until they can afford to buy!
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Which is a very sad way to live...

I agree it's hard and that you need to save and make sacrifices and all of that. Most people realise this, however I don't agree with mocking people who will suffer from an interest rate hike that is all.

And now for something completely different. Everyone in the North of JHB knows about the UFO house. Well it's up for sale for a paltry R14 000 000

http://www.privateproperty.co.za/se...ef=D5995&suburb=517&franchiseid=15&listtype=1

can anyone say more money than sense?
 
janp0s said:
Please provide links and facts, those are mostly rumors
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http://en.wikipedia.org/wiki/United_States_housing_bubble#_note-WP_April_24_2007

and linked articles

http://www.weeklystandard.com/Content/Public/Articles/000/000/012/053ajgwr.asp

http://www.washingtonpost.com/wp-dyn/content/article/2007/04/24/AR2007042400627.html

Remember, read all articles (including the ones above) with pinch of salt. Everyone, depending on which side of the fence they are on (and what they stand to gain or lose) has an opinion which suits them.

What surprises me the most about people is they think propery is infallible and they can't lose money. They've clearly got blinkers on, as people have and will end up in negative equity. There have been numerous instances of propery bubbles in history, including the UK propery crash of the late 80's/early 90's
 
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A few notes:
  • First time home owners can enter the market a little more easily with lower Interest Rates
  • The primary driver for Interest Rate hikes in this country is currently CPIX. CPIX excludes mortgages, yet bondholders are being hit the hardest. A move like this would keep the economy growing and keep CPIX a little more in check.
  • House prices can fall, and when it happens almost single handedly cause recessions of entire economies. When economies enter recessions, more houses are repossessed and more people are left in financial difficulty than you can imagine.
  • Owning a house is one of the easiest ways to invest money in this country. The majority of South Africans save very very little, and their homes are effectively their only real assets.
  • Homeowners who bought R500 000 houses at 10% interest 4 years ago now pay roughly R900 more a month on their mortgage alone. The drive to reduce debt actually worsens many people's debt. Excluding Mortgages from General REPO rate increases will mean more cash to service short and medium term debt - the 2nd biggest driver of Inflation to begin with
  • The interest you pay on a mortgage is lost money. A mortgage is considered by most as "good debt", but when the Interest you pay is more than the quantified value of your home over the long term (and believe it or not, some people pay up to 3 times the interest over the long term). This is lost money, and the more the Interest Rates go up, the more you lose.
 
What would happen if a person wants to improve their primary residence and this involves a loan of X amount? Would they qualify at the lower rate or not? Secondly, if at the lower rate, how can the bank be sure it was used for that, instead of buying more consumer luxuries <42 inch plasma etc> ?
 
air said:
What would happen if a person wants to improve their primary residence and this involves a loan of X amount? Would they qualify at the lower rate or not? Secondly, if at the lower rate, how can the bank be sure it was used for that, instead of buying more consumer luxuries <42 inch plasma etc> ?
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No it would be included in the higher rate. Just to avoid point 2 :)...
 
GavinMannion said:
Not sure what that has to do with the price of bread?
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No - the price of houses. You said "To buy a 1 bedroom flat in Randburg will now cost you about R500 000". I was pointing out that cheaper properties are available. Cut your clothes to suit your cloth.
 
once again rwenzori i agree with you

I bought a run down house in a good area... It took me 4 years to renovate the house.

I did most of the changes myself, mostly worked over weekends and holidays to do the renovations at a fraction of the cost the contractors asked.

Now my house is beautiful...
 
janp0s said:
once again rwenzori i agree with you

I bought a run down house in a good area... It took me 4 years to renovate the house.

I did most of the changes myself, mostly worked over weekends and holidays to do the renovations at a fraction of the cost the contractors asked.

Now my house is beautiful...
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You are obviously lucky. But once again your personal experience is only a suitable benchmark for yourself - not everyone else. So while you may be fortunate to have found a fixer-upper for yourself, not everyone has a) the ability or b) the time to do the same.
 
The majority of South Africans cannot afford to by a home, even in an environment where the interest rates have been at their lowest for as long as I can remember.
Yes higher rates will make it difficult but more so is the phenomenal asking prices.

A major factor determining price must be demand, but as can be seen of late the demand is easing off, albeit superficially due to affordability.
The demand is still there, just the majority cannot afford it. The impact of this will not be the same for all price segments of the market but talking low to middle cost here.

So the market slows down a bit aided by increasing interest rates and tightening up on the granting of credit.
Now property developers / investors / owners / etc cry fowl as their investments are costing them more than they have in the past, they are battling to service their bonds, offload property through suitable buyers and buy to lease is fast becoming a non viable option as the market is overstocked and stacked in favour of the lessee.
Ultimately the growth in the value of the investment slows to a trickle while the cost of financing it escalates.
Downward pressure on pricing is needed to allow some catchup.
Any move that accelerates price growth is bad for those entering the market at this stage.
 
not everyone has a) the ability or b) the time to do the same.
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with (b) I agree...
with (a) I totally disagree

I had 10 thumbs before I started, many things I had to rework.
I believe that anything you put your mind to, you can achieve.

I know now how to do plumbing, electricity wiring, plastering, etc... All because I took it upon myself to learn.

That option (a) is usually the response of lazy @ss ppl
 
janp0s said:
with (b) I agree...
with (a) I totally disagree

I had 10 thumbs before I started, many things I had to rework.
I believe that anything you put your mind to, you can achieve.

I know now how to do plumbing, electricity wiring, plastering, etc... All because I took it upon myself to learn.

That option (a) is usually the response of lazy @ss ppl
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Oh, so every bunny is the same then, eh?
 
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