In the past, apartheid denied the majority of people in South Africa decent homes and land.
Now, the abnormally high prices achieve the same result.
Even teachers can't afford houses in previously "white" suburbs that catered for the poor sectors of the white community in the apartheid South Africa. But now, these houses want to sell for millions. So black people can'nt even afford these.
And, if they buy these what happens:
- Previously advantaged communities get richer
- The buyer (black) is deeeeeeeep in debt
- The buyer does not have any money left over for other necessities like food, education, transport, etc
- Repossession
I think house prices should be controlled so that the masses of this country get access to decent housing.
I think there should be rent-control in order to make accommodation for the masses affordable.
What do you think?
3 comments:
House prices are dictated by supply and demand. There must be more demand for housing in order for the prices to rise so fast. I'm from the UK, so I'm not totally familiar with the way the South African property market works and how easy it is to borrow money there. The UK housing market is in trouble because the prices went crazy over the last few years. Houses were going for 6 times average annual earnings. The banks allowed people to lie about their earnings and get "self-cert" mortgages. This was okay whilst houses continued to rise, but now houses are falling and people cannot service their debt.
I thought that the banks in South Africa were much more cautious with their lending ratios - is this correct?
I'm planning to emigrate to South Africa later this year and was going to build a house (we have a 1Ha plot just outside Gordon's Bay). We are not sure whether to build now, as the 1Ha plot was zoned agricultural but has now been changed to residential with 20 houses/Ha. We wanted a quiet place to build and it sounds like the area is going to be too built-up. The cost of materials and labour have risen strongly over the last couple of years, but house prices seem to have stayed static or have dropped slightly. What do you think the property prices are likely to do within the next 12 months?
I was thinking I might put a log cabin on our 1Ha plot and see if we can sell it to a developer - the cabin could be easily dismantled if required. Another option is to rent a place for 12 months if there is a good chance that house prices will drop further. I have noticed that the yield on rental property is not as good as in the UK. I've seen 2 bed flats in Gordon's bay that sell for R650-700K but rent at R3000-3200pm. That's a yield of just over 5% when the flat I rent out in London gives a gross yield of over 6.5%. This makes me think that it may pay to rent in SA until I see what house prices are doing. Rent control is difficult to enforce, as the rental prices are normally dictated by how much tenants are willing to pay for a particular place. Are you saying the SA government should build low-cost flats/houses and then rent them out at a fair rent or are you saying the government should regulate how much private people can rent their places for? The first option is okay, but the second option isn't practical.
I do think that banks in South Africa have also lent money to people who (banks knew) would not be able to service their bonds. The sad thing about this is that it is the easy access to unrealistically large amounts of credit, has put house prices sky-high. The increase in re-possessions is a good indicator of this.
I believe that governments should do more to keep house prices and rent prices down. It is unrealistic when 45% of one's gross salary is the monthly re-payment. Take into account VAT (14%), food, transport, school fees and medical - too high house prices bind the country in debt.
Hello,
The personal property, is that which can be easily removed from the real estate. Such chattel includes dog houses and particularly the little storage buildings that are so common outside of homes today. Thanks...
Property Gordons Bay
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