Property prices plummet

[LancelotSA]

I am with you there to a point, but surely there are other contributing factors at play, like banks and the reckless lending, massive infrastructure projects and acquisitions with increasing cost or poor budgeting, ESKOMs requirements out of the blue, etc.
This must have a significant influence, it all has to be financed from somewhere?

My understanding is that the lending figures used by the reserve bank are clearly separated into public spending and private spending.

Our banks have not been nearly as reckless with their lending as the US with the sub prime problems. Our banks have always done some checks, even if basic, to ensure you are not too far stretched. Now with the NCA control is even tighter.

Remember often the capital required for infrastructure is obtained by issuing bonds and raising it via private funding. Strangely enough in a recent economic review I attended the one problem the government did have was that they were not spending enough money! Yes, they were underspending on their budgets, so money is not an issue!

The problem is that private individuals did go a little mad when interests rates were so low. Think about it, how many people do you know who have bought new houses or new cars in the last two years. I know stacks. People saw the interest rate drops as a chance to spend more and save very little.