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From: http://capetownbubble.blogspot.com/

(go to site for graphs)

22 January 2008

Standard Bank: Year-on-Year House Price Growth for Dec 2007 Was 0%

From Standard Banks Residential property gauge(PDF):

House price growth as measured by Standard Bank’ median house price1 index was recorded at 0.0% y/y in December 2007. In level terms the median house price

was recorded at R550,000. The December outcome brought the five-month moving

average growth rate to 5.6% y/y.

Here are some graphs from the report (All copyrights remain with Standard Bank). First up house price growth:

If you bought a R1 000 000 house in December 2006 with no money down, you've just given the bank R140 000 to rent your house. You've made no capital gains and all the money you have paid has gone to pay off the interest.

To recover those losses house prices have to rise 14% at least, but forecasts for next year on in the low single figures, if not negative (which is looking more possible every month). Which means you'll lose even more money in 2008. Even putting a 20% down payment has cost you R123 000, and that's money you have a very slim chance of getting back unless you tough it out in your new purchase for at least 7 years.

Next up looks look at mortgage advances:

Mortgage advances are still sky high. The close to 25% of bondholders who took out mortgage advances in 2007 who assumed rising property prices would cover them taking on new debt are going to be in for a suprise. If they try and sell in the near future I would guess they have to bring money to the table to cover the shortfall on what they owe and what the house is now worth.

And finally here's a graph of debt rations and insolvencies:

Notice how the 'Debt repayment to income ratio' grah has usually been a leading indicator(1999-2003). In 2003 the housing bubble kicked in and debt started a uphill trundle while insolvencies remained low. This is probably related to the private sector borrowing graph above. Everyone was "Hey I don't mind getting in debt because rising house prices will cover me taking money out the bond". Oops.

The disconnect between rising debt and insolvencies has been marked in the last 4 years but with housing prices at a virtual standstill that trend will not continue.

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I don't really understand why the SA economy follows the UK's so closely. If there is any justification for high house prices due to a land shortage in the UK, it certainly doesn't apply in SA. The country is rich in natural resources and labour costs are still low.

It is almost as if the business community needs to emulate the problems that the UK has to maintain a first-world feel rather than to be lumped in with the third-world.

p-o-p

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I don't really understand why the SA economy follows the UK's so closely. If there is any justification for high house prices due to a land shortage in the UK, it certainly doesn't apply in SA. The country is rich in natural resources and labour costs are still low.

It is almost as if the business community needs to emulate the problems that the UK has to maintain a first-world feel rather than to be lumped in with the third-world.

p-o-p

I don't think it's a question of SA's economy following the UK's. We have simply experienced a speculative boom fuelled by cheap credit, just like the rest of the world.

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Has ex-pat money had an effect in SA? Frankly I'd have thought you'd have to be mad to invest in property in SA, murders, rapes and carjackings through the roof as far as I can tell.

Been at the Daily Mail again? Of course Africa has problems - look at Kenya a few weeks ago.

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I don't think it's a question of SA's economy following the UK's. We have simply experienced a speculative boom fuelled by cheap credit, just like the rest of the world.

Global problem you say. I had understood from reading this site that it was all Gordon Brown's fault????

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Has ex-pat money had an effect in SA? Frankly I'd have thought you'd have to be mad to invest in property in SA, murders, rapes and carjackings through the roof as far as I can tell.

Not to mention a president-in-waiting and a police commisioner facing racketeering and corruption charges!

On the whole though, we always seem to weather whatever crises are thrown our way, so I'm not pessimistic about our future. SA also seems to get a bad rap in the press - much of what is reported is overblown (that's not to say we don't have serious issues).

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Has ex-pat money had an effect in SA? Frankly I'd have thought you'd have to be mad to invest in property in SA, murders, rapes and carjackings through the roof as far as I can tell.

I know a dude who has bought 6 properties in S.A. in new up and coming areas north of Cape Town that will get all the tourists. New builds. He cannot let them go at the moment as there is no interest in it at all. He also is a "property developer" here in the UK in another traditional South African area of Colliers Wood. I'm watching him closely. He managed to make 20k off a property he bought 3 months ago in December.

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Has ex-pat money had an effect in SA? Frankly I'd have thought you'd have to be mad to invest in property in SA, murders, rapes and carjackings through the roof as far as I can tell.

South Africa's crime figures make dreadful reading but that distorts the reality that there are many worse places that simply don't keep statistics of this type. That is no excuse for the SA government suppressing the figures as they did.

It is also a very big place so has a lot of variation. If one were looking for a similar geographical spread, it would be fairer to include Albania's and all other counties in between into crime figures into the UK's. That's assuming that anybody in Albania keeps track of these things.

p-o-p

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A crash is probably happening in South Africa simply because everybody is leaving, certainly the educated ones are bailing out left right and centre.

In my industry both here and in NZ, SA engineers are highly skilled and sought after, and in turn making emigrating easy.

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A crash is probably happening in South Africa simply because everybody is leaving, certainly the educated ones are bailing out left right and centre.

In my industry both here and in NZ, SA engineers are highly skilled and sought after, and in turn making emigrating easy.

I see your geo-political knowledge is as profound as your views on the UK housing market.

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South Africa's crime figures make dreadful reading but that distorts the reality that there are many worse places that simply don't keep statistics of this type. That is no excuse for the SA government suppressing the figures as they did.

You're damn right they are depressing reading, and trying to fob them off by saying things are bad elsewhere is akin to a french soldier in Verdun saying "Oh well. at least the Russians are getting slaughtered even faster in Tannenburg so everything is hunky-dorry, lets all have a cigar"

It doesnt make it good. And for a country that has 1st world pretentions its farking appalling. Its farking appalling in the absolute sense as well. It would be called a humanitarian crisis if it were in Europe or Asia.

Its also a very big place so has a lot of variation. If one were looking for a similar geographical spread, it would be fairer to include Albania's and all other counties in between into crime figures into the UK's. That's assuming that anybody in Albania keeps track of these things.

Absolute crap, Albania is a totaly separate socio-political entity, and I'd be amazed if Albania genuinely did have a higher rate, or even a rate that is anywhere close to that of SA, of gratuitously violent and sexualy violent crimes.

Where do you live by the way? You arent perhaps hiding in the UK like the rest of the chicken runners are you? Strange site to be posting if you arent in the UK......

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You're damn right they are depressing reading, and trying to fob them off by saying things are bad elsewhere is akin to a french soldier in Verdun saying "Oh well. at least the Russians are getting slaughtered even faster in Tannenburg so everything is hunky-dorry, lets all have a cigar"

It doesnt make it good. And for a country that has 1st world pretentions its farking appalling. Its farking appalling in the absolute sense as well. It would be called a humanitarian crisis if it were in Europe or Asia.

Absolute crap, Albania is a totaly separate socio-political entity, and I'd be amazed if Albania genuinely did have a higher rate, or even a rate that is anywhere close to that of SA, of gratuitously violent and sexualy violent crimes.

Where do you live by the way? You arent perhaps hiding in the UK like the rest of the chicken runners are you? Strange site to be posting if you arent in the UK......

SA has a serious crime problem - it is the third world aspect. It isn't getting worse. It might improve with a bit of effort.

Which bit of Asia are you comparing it to? Pakistan seems rather more iffy at the moment.

Any Albanian stats? Most of the SA stats come from what would be covered here by 'Operation Trident'. Car thefts and associated violence, yes, but to a degree that is of their own making. If your car cannot be stolen without you being there with the keys, thugs will take the car after banging you on the head. No justification - reality. Sexual crime? It's a serious problem but I doubt whether it is any worse than it has been - just the system now includes rapes/sexual abuses that weren't counted in the apartheid years because the were black on black.

In the Uk and have done since the early 1970s - You? And the basis of your expertise on SA?

p-o-p

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It's in AFRICA - the same continent that gave the world Sierra Leone, Nigeria, Congo, Somalia, Uganda, Zimbabwe, Sudan etc etc and now Kenya. If people on this country don't want a flood of scores of millions of refugees in the not-too-distant future I suggest they stop posturing and start thinking. Which at least NuLabour has done - quite possibly the only unqualified success of the last 11 years.

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It's in AFRICA - the same continent that gave the world Sierra Leone, Nigeria, Congo, Somalia, Uganda, Zimbabwe, Sudan etc etc and now Kenya. If people on this country don't want a flood of scores of millions of refugees in the not-too-distant future I suggest they stop posturing and start thinking. Which at least NuLabour has done - quite possibly the only unqualified success of the last 11 years.

Good points for Jonewer:

Any stats on theft in Sierra Leone?

Any stats on fraud and deception in Nigeria?

Any stats on murder in the Congo?

Any stats on muder in Somalia?

Not to sure on Uganda - How are things in Zimbabwe on the corruption front? Any figures on assaults?

p-o-p

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  • 315 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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