rwenzori
Honorary Master
Aw c'mon man! Unless you have parkinsons or dementia you can do some DIY stuff at least - even if it is just painting!
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Letter to Tito
- Thread starter janp0s
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Aw c'mon man! Unless you have parkinsons or dementia you can do some DIY stuff at least - even if it is just painting!
Everyone can paint, sure. Then what? Everyone can build, tile, put carpets in, build cupboards, plaster walls and screed ceilings, yes? Wow. Talented bunch you South Africans.
rwenzori
Honorary Master
It is amazing what you can do if you try, and when you have little $$$.
I agree, but different people have different abilities, and home renovation is an arduous task to those not so creative.
ShaunSA
Derailment Squad
I have to admit that I suck at home renovation
I was never good with my hands. Would most probably end up blowing myself up. And the house I have to admit that I suck at home renovation
Agree with you there, when I'm done, my house would actually go down in value
Good reason to keep the interest rates for mortgages separate. Make interest rates for other types of loans higher.
And of course you should be barred from using money in your home loan for anything other than your home.
Vrotappel
Bulls fan
Whenever I get the urge to do something about my home I go sit in front of the computer and wait for it to go away.
Would be nice if they can separate bond rates from other debt. Then maybe I can afford a nice LCD TV
that would certainly relieve the much needed natural downward pressure that is being experienced in the property price at the moment, which could well see property year on year gains gather speed again.
Sorry I am not convinced in the least that a separation is the right thing for the general population. It will slam the door shut on many trying to enter the market but for those with property and the rich with big portfolio's it would be like manna from heaven.
What you fail to realise is that there are low cost houses that do not increase in value nearly as vastly or quickly as middle and upper income class houses. First time buyers in the middle income group should come to terms with the fact that they cannot start off in a mansion. Lower interest rates on houses will enable more people to buy houses. Demand influences house prices, and when demand outstrips supply then house prices go up. At the moment with higher interest rates artificially limiting demand there is a bigger underlying danger of a crash in the housing market directly as a result of people not being able to afford their houses on the back of all the rate hikes.
Do not forget - the interest rates were hiked in an attempt to slow demand for short term high interest debt - not to kill off demand for houses and slow down house prices. Unfortunately it did exactly what was not intended, and ended up forcing more people to plunge themselves into short term high interest debt in a bid to survive.
lion_fish
Expert Member
Actually, I eluded to the point you are trying to make in #38 about different price brackets in the market.
The first segment of the market that would be affected would be the upper brackets 'above' what is deemed to be middle class.
Correct, demand fuels prices, and the main demand in SA is at the middle to lower end of the market. This demand will slow when as you put it, people realise that they cannot afford to buy a middle class 'mansion' they will have to trade down which slows down the growth in that area.
Middle class 'mansion' owners with bonds on the other hand, will also have to readjust their own spending habits to service their bonds and if they cannot they should realise they belong at a lower pleb level and trade down.
Higher interest rates are limiting demand but not necessarily just that on its own. People in this country carry so much debt that any move upwards in rates will force people to rethink their spending patterns.
Throw in a new credit act and 'massive' middle class house price growth over the last 4-5 years and you have an answer.
The property market was showing signs of slowing down last year already.
Average house price in SA according to data is around the R800K mark.
I don't have the actual figure but if you take y/y growth into consideration then 4 years ago that would have been around R400K.
Salaries have increased on average at around 7% y/y.
Certainly those entering the market rarely are able to buy at the average unless they are very fortunate but still I think that tells a story of its own and is perhaps a more relevant reason as to why some people are struggling to offload.
Sure rates were hiked to slow reckless spending, but they were done at a very gradual pace buy the MPC and the reserve bank providing time for people to adjust.
Taking out more debt to service debt is just plain stupid and a reflection of how right the reserve bank is when they caution on household debt levels being way to high in SA.
How else do you correct that?
The people that will feel the pinch now the most are those that have entered into bond agreements over the last 8 months or so as most would be maxed out on credit, not the folks that bought when property was at a low so a crash due to massive defaulters I would think would be highly unlikely.
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1. Short term debt did not slow down, in fact it increased. And Short term debt (1 - 6 years debt) is also the most expensive debt and more likely to chew into people's savings.
2. Mortgage debt is good debt, as it is financing an asset with good growth potential. The banks are squarely to blame for granting exorbitant home loans to the middle income earners. Lower income earners cannot buy homes, and are forced to rent or take occupation of government provided housing.
3.It has become somewhat easier over the period you allude to to buy lower cost homes, sneeky. In fact, the government has assisted by scrapping transfer duties, etc.
4. The demand for housing is not going to slow down. When a buyers market ends, the rental market starts, and that is where we are going to now.
5. House prices are not going down, they're slowing down, which means the y/y growth of house prices has dropped.
6. The combination of lower interest rates, scrapping of transfer duties on lower cost houses, higher demand and less land for possible development has overall attributed to the vast growth in the real estate market. The banks, however, pushed it over the top with their property valuations. As usual, South African banks' eyes were too big for their stomachs. Naturally all risk they assume is simply offloaded to their clients.
7. Our real estate growth was in line with first world countries, showing that our economy was in fact really growing exceptionally well.
8. The CPIX is the biggest concern of the Reserve Bank and that has primarily been their only major concern. It was this that drove interest rate hikes - not home loans. As previously mentioned, CPIX excludes mortgages. If you want to exclude mortgages from CPIX, then exclude mortgages from interest rate hikes as well.
2. Mortgage debt is good debt, as it is financing an asset with good growth potential. The banks are squarely to blame for granting exorbitant home loans to the middle income earners. Lower income earners cannot buy homes, and are forced to rent or take occupation of government provided housing.
3.It has become somewhat easier over the period you allude to to buy lower cost homes, sneeky. In fact, the government has assisted by scrapping transfer duties, etc.
4. The demand for housing is not going to slow down. When a buyers market ends, the rental market starts, and that is where we are going to now.
5. House prices are not going down, they're slowing down, which means the y/y growth of house prices has dropped.
6. The combination of lower interest rates, scrapping of transfer duties on lower cost houses, higher demand and less land for possible development has overall attributed to the vast growth in the real estate market. The banks, however, pushed it over the top with their property valuations. As usual, South African banks' eyes were too big for their stomachs. Naturally all risk they assume is simply offloaded to their clients.
7. Our real estate growth was in line with first world countries, showing that our economy was in fact really growing exceptionally well.
8. The CPIX is the biggest concern of the Reserve Bank and that has primarily been their only major concern. It was this that drove interest rate hikes - not home loans. As previously mentioned, CPIX excludes mortgages. If you want to exclude mortgages from CPIX, then exclude mortgages from interest rate hikes as well.
1. hence one reason why interest rates keep going up.
2. agree, but you cant enjoy massive above normal growth and expect not to pay for it sooner or later.
3. agree, how easy it is I am not sure, but yes, this is for below R500k if memory serves me correctly.
4. our country will always have massive demand for housing, we need to look at specific price brackets though. Taking average house price in SA at R800K, the demand for houses in this price range will slow and more and more people will look to trade lower than that purely due to affordability. There will be more people wanted to sell with increasing rates, good for buyers bad if you are trying to offload a property you bought 4 years ago for R400K @ R800K now.
5. Don't actually recall ever saying that house prices were going down. As mentioned before separating the bond rate from the conventional rate will alleviate the 'downward pressure' that is being experienced in the market at the moment. The downward pressure is slowing down y/y growth which is a good thing for first time buyers.
6. Agree and now those bonded carry the can. Debt is still debt no matter how you look at it.
7. if that is the case then hold onto your hats if you look at the US. Property was undervalued in the past, land is infinite. The market corrected but overly so, time to pull back a bit.
8. Agree, but you will also find that people have taken advantage of the cheapest money you will ever borrow (home loans) and have used their access bonds to max, got a double mortgage to pay for all that other nice stuff.
I cant find one person at our offices that has not done so and now they are K@kking themselves.
2. agree, but you cant enjoy massive above normal growth and expect not to pay for it sooner or later.
3. agree, how easy it is I am not sure, but yes, this is for below R500k if memory serves me correctly.
4. our country will always have massive demand for housing, we need to look at specific price brackets though. Taking average house price in SA at R800K, the demand for houses in this price range will slow and more and more people will look to trade lower than that purely due to affordability. There will be more people wanted to sell with increasing rates, good for buyers bad if you are trying to offload a property you bought 4 years ago for R400K @ R800K now.
5. Don't actually recall ever saying that house prices were going down. As mentioned before separating the bond rate from the conventional rate will alleviate the 'downward pressure' that is being experienced in the market at the moment. The downward pressure is slowing down y/y growth which is a good thing for first time buyers.
6. Agree and now those bonded carry the can. Debt is still debt no matter how you look at it.
7. if that is the case then hold onto your hats if you look at the US. Property was undervalued in the past, land is infinite. The market corrected but overly so, time to pull back a bit.
8. Agree, but you will also find that people have taken advantage of the cheapest money you will ever borrow (home loans) and have used their access bonds to max, got a double mortgage to pay for all that other nice stuff.
I cant find one person at our offices that has not done so and now they are K@kking themselves.
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