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Buzwiz

House Prices Are Much Too High

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B)

I think that property prices are manipulated to keep the rich richer and the poor poorer. It is surprising how the drop in interest rates abnormally inflate house prices, while a increase in rates keep prices stubbornly constant at an already high price.

Furthermore, building material prices also increase at the same time as house price increases. This does not make sence.

The poor people are offered "high" morgages by banks at low interest rates. Then suddenly interest rates go up and the poor buyer loses his house. Look at the number of repossessions in the recent months in South Africa.

This is a shame. Land and houses are a basic need for all, like water and air. It should not be used as a quick-get-rich item.

:(

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B)

I think that property prices are manipulated to keep the rich richer and the poor poorer. It is surprising how the drop in interest rates abnormally inflate house prices, while a increase in rates keep prices stubbornly constant at an already high price.

Furthermore, building material prices also increase at the same time as house price increases. This does not make sence.

The poor people are offered "high" morgages by banks at low interest rates. Then suddenly interest rates go up and the poor buyer loses his house. Look at the number of repossessions in the recent months in South Africa.

This is a shame. Land and houses are a basic need for all, like water and air. It should not be used as a quick-get-rich item.

:(

MOD EDIT WEBSITE REMOVED

There is no conspiracy to keep things so expensive in Britain.

Rather, it is endemic with the society here; greed that is. Greed coupled with little or no morality and a growing legion of poorly educated, lazy citizens. Citizens who are being abused and tinkered with by the very rich. Same as it ever was really.

It is a proud British trait... to sell out your soul for a bean, to sell yourself a noose, to get the 'edge'. It's all very shallow and materialistic. I have lived in several countries, and nobody succeeds at fvcking people better than a Brit. It's in our nature.

Edited by cashinmattress

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B)

I think that property prices are manipulated to keep the rich richer and the poor poorer. It is surprising how the drop in interest rates abnormally inflate house prices, while a increase in rates keep prices stubbornly constant at an already high price.

Furthermore, building material prices also increase at the same time as house price increases. This does not make sence.

The poor people are offered "high" morgages by banks at low interest rates. Then suddenly interest rates go up and the poor buyer loses his house. Look at the number of repossessions in the recent months in South Africa.

This is a shame. Land and houses are a basic need for all, like water and air. It should not be used as a quick-get-rich item.

:(

MOD EDIT WEBSITE REMOVED

We have debated this numerous times my friend. The morality, the stupidity, vested interests etc. Don't worry-interest rates have only one way to go and that is NOT down. I have discussed, on these forums, the disconnect between LIBOR, BOE rates, Fed Funds rates and 30 year treasury yields, 30 year fixed mortgage rates in the US etc. There is no recognisable spreads between any of the components (historically that is). If ever there was a bull trap this is it. Patience my friend, all will be revealed by the end of 2009, if not sooner. When summer silly season ends it will be a long, dark, lonely winter acomin.

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There is no conspiracy to keep things so expensive in Britain.

Rather, it is endemic with the society here; greed that is. Greed coupled with little or no morality and a growing legion of poorly educated, lazy citizens. Citizens who are being abused and tinkered with by the very rich. Same as it ever was really.

It is a proud British trait... to sell out your soul for a bean, to sell yourself a noose, to get the 'edge'. It's all very shallow and materialistic. I have lived in several countries, and nobody succeeds at fvcking people better than a Brit. It's in our nature.

+1

It used to be reserved for the poor natives of the colonies as the Cecil Rhodes's etc. systematically stole the natural resources and planted a flag (or a gunboat) as Eddie Izzard tells it. Now there is nobody left to plunder abroad then we may as well pinch our fellow countryman's lunch. That's all it is really-same game different playing field.

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Furthermore, building material prices also increase at the same time as house price increases. This does not make sence.

This is because the largest portion of the cost of EVERYTHING is land.

Since the people who make the bricks have to pay more for houses, they demand higher wages, and that cost gets added to the end product price. This applies to EVERYTHING you buy.

If no-one ANYWHERE had to pay a mortgage, just imagine how cheap everything would be... you could support a familty on less than minimum wage.

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+1

It used to be reserved for the poor natives of the colonies as the Cecil Rhodes's etc. systematically stole the natural resources and planted a flag (or a gunboat) as Eddie Izzard tells it. Now there is nobody left to plunder abroad then we may as well pinch our fellow countryman's lunch. That's all it is really-same game different playing field.

Poor natives?!

BS. We never treated our own better. Children forced to work 18 hours a day in textile mills, beaten if they didnt produce enough, losing limbs in machinery.

Same game same playing field more like.

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This is because the largest portion of the cost of EVERYTHING is land.

Since the people who make the bricks have to pay more for houses, they demand higher wages, and that cost gets added to the end product price. This applies to EVERYTHING you buy.

If no-one ANYWHERE had to pay a mortgage, just imagine how cheap everything would be... you could support a familty on less than minimum wage.

+1

the truth

Property speculation is just a waste of productive money.

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Poor natives?!

BS. We never treated our own better. Children forced to work 18 hours a day in textile mills, beaten if they didnt produce enough, losing limbs in machinery.

Same game same playing field more like.

Second thoughts mate, you are absoluely correct. My family have been coal miners for the last three generations. My Dad died of lung disease at 70-my Mum got nowt-said it wasn't connected. I was reading some stuff about the young children who pushed the tubs up steep inclines. They pushed from behind and through exhaustion they sometimes slipped. Tubs used to roll backwards and crush the poor little buggers. Nice work if you can get it.

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We When summer silly season ends it will be a long, dark, lonely winter acomin.

+1. Here's hoping I have a job in January.

(TaxAbuserOfTheWeek @ Jun 3 2009, 04:54 PM)

This is because the largest portion of the cost of EVERYTHING is land.

In the UK there was never an effective revolution, most land is still held by the Crown, the CofE, the Oxford and Cambridge colleges, a number of big developers, and some aristocrats. Combined with planning law, this mafia maintain an artificially high price for land. It IS a conspiracy, of a sort.

Edited by gleeful_expat

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As another poster here said, anyone who isn't either earning a very high salary or a benefits scrounger (with kids as required for the lavish benefits) is being screwed. You need to think outside the box to escape it.

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This is because the largest portion of the cost of EVERYTHING is land.

Since the people who make the bricks have to pay more for houses, they demand higher wages, and that cost gets added to the end product price. This applies to EVERYTHING you buy.

If no-one ANYWHERE had to pay a mortgage, just imagine how cheap everything would be... you could support a familty on less than minimum wage.

Does this mean that a "mortgage" is the root cause of "Poverty". Then I suggest that policies be put in place to keep house prices within the reach of the poor.

At the moment banks don't seem to have any policy on how house prices are assessed. For example: If a seller asks

$125 000 or R1m for his house and a buyer puts in his offer of R1m, the bank usually approves based on the "affordability" of the buyer, without even considering the value of the house. This is really crazy.

I suggest that banks rate houses according to: number of bedrooms, bathrooms, cupboards, quality of materials, finishes, etc. In this way cost of basic 3-bedroom, 2-bathroom houses with "cheap" finishes would be within the reach of the poor.

I am tired of seeing people pay R1m for "shacks" and then becoming bankrupt and losing all. It is sad.

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Edited by Buzwiz

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Does this mean that a "mortgage" is the root cause of "Poverty". Then I suggest that policies be put in place to keep house prices within the reach of the poor.

At the moment banks don't seem to have any policy on how house prices are assessed. For example: If a seller asks

$125 000 or R1m for his house and a buyer puts in his offer of R1m, the bank usually approves based on the "affordability" of the buyer, without even considering the value of the house. This is really crazy.

I suggest that banks rate houses according to: number of bedrooms, bathrooms, cupboards, quality of materials, finishes, etc. In this way cost of basic 3-bedroom, 2-bathroom houses with "cheap" finishes would be within the reach of the poor.

I am tired of seeing people pay R1m for "shacks" and then becoming bankrupt and losing all. It is sad.

Visit My Blog

This post seems to have a few contradictions. You say the bank doesn't look at the "value" of a house, but more whether the buyer can afford to make the payments. You then say that buyers who purchase a shack for R1m are then going bankrupt and losing all. So if the bank sees that the buyer can meet the repayments than why do they then lose all their money?

I always thought the SA banks were a lot more "careful" when lending, by having lower income multiples for their loans.

IMO it is not practical to easily "rate" houses regarding size/quality of fixtures/location etc. All houses are different and some people are happy with a small house with luxury fittings. Other people require lots of internal space, but may just want a basic kitchen and bathroom. I was rather surprised to hear that houses were not valued by the banks in SA. In the UK the banks send round a RICS surveyor to value the place. This, however, isn't and cannot be an exact science as what a house is worth is a subjective opinion. There could be a variation of 10% in valuations between 2 RICS surveyors, especially when there aren't many places nearby that have sold recently. The only fixed thing about a house is the current size of the dwelling, so in theory a 120sqm place should be worth more than a 100sqm one. Build costs for an "average" SA house is R6000/sqm, so this gives a ball-park figure to value a place based on the size. Most of the other factors, however, are subjective i.e. whether it is in a good area, has quality fittings or is in good decorative order.

The size and location of land is also very important in the UK, but isn't such a big factor in SA. I have a 1Ha (2.5 acre) plot of land just outside Gordon's Bay with a glimpse of the sea and this was R1m (equivalent to under £70K 2 years ago). It was zoned agricultural smallholding with permission to build 2 dwellings. This land has now been incorporated into the Gordon's Bay town limits and has been rezoned residential at 20 houses/Ha. So much for my quiet place in the country :( , but hopefully I can sell it to a developer now for a decent profit :lol: .

Edited by Spark

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There is no conspiracy to keep things so expensive in Britain.

I actually disagree, but for different reasons than you might think.

I could seriously write a book about this phenomena, but I think that what we have been witnessing over the last 20 years is a co-ordinated and well thought-out generational theft. We can see this in everything from houses to pensions to jobs being taken from the young, by the old.

What's more they will fight tooth and nail for what they've taken from us. Witness the closing off of final salary pension schemes - John Varley the CEO of Barclays declares their final salary scheme untenable, but only because he and a group of other senior executives have decided that they don't want to give up any of their pensions.

We're already seeing the effects of this as we see whole generations stuck in McJobs living in rented accommodation with no pension provision. While those only slightly older own properties (part funded by a by taxpayers' money, by a political party mostly made up of older people) have nice pensions and good jobs.

It is a recipe for long term disaster, without a doubt because older generations will find themselves shafted at just a time when they are most vulnerable - their nice homes and fat pensions will have to be means tested back from them by successive impoverished generations.

It will not be pretty, but will be very necessary.

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