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bungy

South African Housing Bubble

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http://www.fin24.co.za/articles/default/di...18-1795_1839351

The crucial ratio of average house prices to average incomes has raced up since 1998 from a sub-par 3.6 to an unsustainable 7 plus. That requires further correction.

Correct me if I am wrong, but I thought that a ratio of 3.6 would be about spot on.

They obviously have plent of vested interests out in SA too.

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This was a global bubble. There are alot of reasons for this, low interest rates in the states (and uk) after sept 11th certainly played a part... The result will be a global bust, and a generation that jumped onto that ladder will be paying for there parents retirement with there debt.

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http://www.fin24.co.za/articles/default/di...18-1795_1839351

Correct me if I am wrong, but I thought that a ratio of 3.6 would be about spot on.

They obviously have plent of vested interests out in SA too.

I was there just over a year ago for a holiday, and had a look into housing costs & the job market (Cape area).

I think there are some inportant differences between the UK and SA market. The first is the large number of very poorly paid and educated (black) people. They don't tend to be homeowners, and live in squatter camps. This will mean that the average wage is not the wage of the typically white housebuyer. Also, there is still a large amount of purchases by expat Europeans, cashing in on the relative difference in prices, who are probably quite unaffected as the house they've sold in Europe is similarly inflated in value.

White collar jobs paid entry-level wages for experienced staff, but the cost of most non-imported essential items was correspondingly lower. Most of the Europeans we saw had bought houses were there to make their pensions go further in a lower cost-of-living country, as well as the (actually pretty good) lifestyle.

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Guest consa

Average Black persons wage = (R50/day) roughly £5/day

Average White persons wage is variable but say R2500/week roughly £250/week or R130K PA

this would equate to approx 3.6xR130K = R468 000 on correct multiples of earnings for average house

here are some houses

please bear in mind the average house comes with pool and is usually detached.

What we have in this country is a huge wealth Gap which is closing with some wealthy Black people entering the property market now, there is a huge difference between the poor black people and the wealthy Indians and whites, personally I don't see that this combination is good for any South Africans white, black or Indian.

There has been huge speculation from the UK and Hout Bay in Cape Town is 90% British Owned

divide price by 10 to get rough UK equivalent, although the rate is between 11 and 12 R/£

http://www.wakefields.co.za

http://www.seeff.co.za

THIS IS A BIG BUBBLE.

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I am South African and live in London.

I have bought and sold my property in London and bought an apartment in Cape Town 2 years ago.

This will all sound terribly cliched I am sure but I honestly think SOuth Africa is a slightly different market to anywhere else in the World.

There has been a lot of speculation in our property market but I think the boom still has a long way to go.

I have been in the Uk for 6 years now and travel home for work and pleasure at least twice a year - the difference in the country from six years ago till now is nothing short of astonishing, there seems to be so much development and money pouring into the country that I just can't see the boom slowing down for a long while.

there is a whole new middle class being developed that is moving from the townships into the suburbs with their new found and deserved wealth.

The interest in South Africa as a tourist destination is also at an all time high and I have never heard anyone complaining about their holiday on their return.... everybody seems to love it!

I am sure i will debunked by some clever economical theory but...... if you make the trip out there and see the pace of growth for yourself I am sure you might just change your mind.......

One last little peace of anecdotal...... an average BMW costs about equivalent £25 000 (ish) and the average house costs about £80 000 (ish), not saying that this ratio is to be relied on in any sense but it is interesting to compare the same thing in the UK

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Guest consa
I am South African and live in London.

I have bought and sold my property in London and bought an apartment in Cape Town 2 years ago.

I am a South African and have owned a property in Durban which I sold Oct 04 and returned to the UK

This will all sound terribly cliched I am sure but I honestly think SOuth Africa is a slightly different market to anywhere else in the World.

Why?

South Africa has been flooded with Investors seeking good returns for their money, who will they sell to to recoup should they wish?

There has been a lot of speculation in our property market but I think the boom still has a long way to go.

It has already peaked and in in decline now

http://forum.*********************.com/ind...hp?showforum=12

I have been in the Uk for 6 years now and travel home for work and pleasure at least twice a year - the difference in the country from six years ago till now is nothing short of astonishing

So is the massive corruption

There seems to be so much development and money pouring into the country that I just can't see the boom slowing down for a long while.

It already is, see above link.

there is a whole new middle class being developed that is moving from the townships into the suburbs with their new found and deserved wealth.

True, I hope it isn't taken away at the same rate, there is a huge split between the rich ex-township people and the poor one's causing some frictions

The interest in South Africa as a tourist destination is also at an all time high and I have never heard anyone complaining about their holiday on their return.... everybody seems to love it!

Except for the 30 or so car jackings per DAY in Durban without the other crime etc. J'burg probably the most dangerous City in the World!! Not to mention the rape stats and raping babies FFS "to cure aids",

I am sure i will debunked by some clever economical theory but...... if you make the trip out there and see the pace of growth for yourself I am sure you might just change your mind.......

I have

One last little peace of anecdotal...... an average BMW costs about equivalent £25 000 (ish) and the average house costs about £80 000 (ish), not saying that this ratio is to be relied on in any sense but it is interesting to compare the same thing in the UK

Yes cars are very expensive but you don't need an MOT every year and this holds the price up, you only need a roadworthy certificate on sale and these can be obtained for a couple of bucks if you know what I mean.

House prices are cheap for a reason - Safety.

Beautiful country, but a long way to go to sort itself out, especially when the Government are starting to endorse Zim land grab laws hmmm..........

Edited by consa

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There has been a lot of speculation in our property market but I think the boom still has a long way to go.

[/quote]

Hmmmm............the South African housing bubble according to the Economist article 'in come the waves' has increased by +23.6% in Q1 in 2005 and has increased by +244% between 97 -05, more than any other country including the UK. The market has become hugely over inflated partly due to the new black wealthy class now buying property and partly due to the ANC government crackdown enforcing the repatriation of illegal externaly held funds of which a large portion has found its way into the property market. Most property is way beyond the reach of the average person in SA and is limited only to the wealthy elite.

Whatever the market drivers in South Africa, I am afraid like all other over inflated markets, the bigger the rise the bigger the fall and the South African property market will face the same fate as other global bubbles - possibly even more so.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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