SA 'heading towards recession'

[LancelotSA]

jeez, sorry sirlancelot, didnt mean to post something valid and on topic.
no money means nobody buying houses, a link to this murmored recession.

was just merely querying if normal, URGENT-type sales expect to sit on the market for 7months+, or is it because PEOPLE HAVE NO MONEY.
emigration has nothing to do with my motivation for posting, there is nothing between the lines so stop looking.

OK, I'll answer but the repeated use of emigrating led me to believe otherwise, Sir Biteme.

People bought houses to the limit which they were permitted, or more truthfully could afford, when interest rates were low. This "out of control" spending, on not just houses but everything including credit cards etc, led to inflation starting to test the target range. Government slowly started increasing interest rates. People still bought on credit. Credit act brought in to try to control this. Interest rates up some more. Still people bought on credit as they felt richer in the lower interest rate environment we have not experienced in most of our lifetimes.

Now we have had numerous interest rate hikes and people are feeling the pinch. Those extra few hundreds, or in some cases thousands, that need to be paid in interest every month is starting to bite. People cannot afford to pay for their houses anymore. Yes, some blame the useless government and seek greener grass elsewhere. Others are forced by the banks to move. The point is the interest rate hikes are made to stop consumer spending. It is working...

 

[Ou grote]

OK, I'll answer but the repeated use of emigrating led me to believe otherwise, Sir Biteme.

People bought houses to the limit which they were permitted, or more truthfully could afford, when interest rates were low. This "out of control" spending, on not just houses but everything including credit cards etc, led to inflation starting to test the target range. Government slowly started increasing interest rates. People still bought on credit. Credit act brought in to try to control this. Interest rates up some more. Still people bought on credit as they felt richer in the lower interest rate environment we have not experienced in most of our lifetimes.

Now we have had numerous interest rate hikes and people are feeling the pinch. Those extra few hundreds, or in some cases thousands, that need to be paid in interest every month is starting to bite. People cannot afford to pay for their houses anymore. Yes, some blame the useless government and seek greener grass elsewhere. Others are forced by the banks to move. The point is the interest rate hikes are made to stop consumer spending. It is working...

Not me

 

[LancelotSA]

Not me

Well interest rate movements are not dependent on the individual as a single entity, the reserve bank reacts to the economy as a whole....

The same with Eskom power cuts...


That's life!

According to the latest Reserve Bank’s Quarterly Bulletin (March 2008), the ratio of household debt to disposable income rose to 77.6% in Q4 2007, compared with 72.8% at the end of 2006. This is obviously the highest level of household debt ever recorded in South Africa. At the same time, net personal savings was measured at -0.5% of disposable income.

 

[BiteMe]

Others are forced by the banks to move. The point is the interest rate hikes are made to stop consumer spending. It is working...

ok, we are on the same page now, because that was the point i was making.

but now you are confusing me, because you seem to say we wont have a recession, yet you agree people are no longer spending at the rate they used to.

and i correct in saying you believe it'll just slow down, but still remain positive and not slip into a recession?
i dont agree with that, but i'm in no mood to argue the point tonight

 

[LancelotSA]

ok, we are on the same page now, because that was the point i was making.

but now you are confusing me, because you seem to say we wont have a recession, yet you agree people are no longer spending at the rate they used to.

and i correct in saying you believe it'll just slow down, but still remain positive and not slip into a recession?
i dont agree with that, but i'm in no mood to argue the point tonight

Remember economic growth is not driven by consumers alone.... public spending also affects this and we have major infrastructure undertakings over the next fews years...

 

[Slooth]

Remember economic growth is not driven by consumers alone.... public spending also affects this and we have major infrastructure undertakings over the next fews years...

And lets not forget investment confidence

 

[LancelotSA]

And lets not forget investment confidence

Yip, you are right, but as mentioned in other threads posted by me, international investors and analysts view of this country is still positive. The negativity is internal... as is the case in the US currently - consumer confidence way down there too.

 

[Slooth]

Yip, you are right, but as mentioned in other threads posted by me, international investors and analysts view of this country is still positive. The negativity is internal... as is the case in the US currently - consumer confidence way down there too.

Let's be deadly honest. You posted a view, but for every view there's a counter view. I'm not presenting an arguement, I merely stating a fact. I admire a positive outlook

 

[Ou grote]

Well interest rate movements are not dependent on the individual as a single entity, the reserve bank reacts to the economy as a whole....

The same with Eskom power cuts...


That's life!

Cool, thought u were saying I was one of "them".

 

[dualmeister]

Good thing my house and car are paid off already

 

[Slooth]

Good thing my house and car are paid off already

You're fortunate

 

[noxibox]

Remember economic growth is not driven by consumers alone.... public spending also affects this and we have major infrastructure undertakings over the next fews years...

Government spending also drives inflation.

The point is the interest rate hikes are made to stop consumer spending. It is working...

Which would be worth considering if that was the only and core factor driving inflation in this country. There was and is more behind it and so far no evidence that the interest rates are doing anything other than harm.

According to the latest Reserve Bank’s Quarterly Bulletin (March 2008), the ratio of household debt to disposable income rose to 77.6% in Q4 2007, compared with 72.8% at the end of 2006. This is obviously the highest level of household debt ever recorded in South Africa. At the same time, net personal savings was measured at -0.5% of disposable income.

Excessive interest rates at work.