Comments on: Property in South Africa http://www.techblog.co.za/2007/06/18/property-in-south-africa/ Tech - Gadgets - Internet News Tue, 22 May 2012 10:00:47 +0000 http://wordpress.org/?v=2.7 hourly 1 By: Rob http://www.techblog.co.za/2007/06/18/property-in-south-africa/comment-page-1/#comment-26801 Rob Tue, 19 Jun 2007 07:16:49 +0000 http://www.techblog.co.za/2007/06/18/property-in-south-africa/#comment-26801 Jono Said: What I can say is that the days of speculators are definitely gone and that investing is now for the long term. This inherently means people geared to the eyeballs in the hope of a quick profit turn are going to struggle to keep a normal lifestyle as the interest rates move around and the cost of living finds a settling point. I must admit with Pete that Commercial property does form a better investment vehicle (that’s a sales point for me but thanks for leading it Pete) BUT this should be separated from the decision of where you believe your home is or should be. In effect your home, although partially an investment, should be viewed in a different light to other investments as it is not just a numbers decision (nor should it be). Just ask any wife… Jono Said:

What I can say is that the days of speculators are definitely gone and that investing is now for the long term. This inherently means people geared to the eyeballs in the hope of a quick profit turn are going to struggle to keep a normal lifestyle as the interest rates move around and the cost of living finds a settling point.

I must admit with Pete that Commercial property does form a better investment vehicle (that’s a sales point for me but thanks for leading it Pete) BUT this should be separated from the decision of where you believe your home is or should be. In effect your home, although partially an investment, should be viewed in a different light to other investments as it is not just a numbers decision (nor should it be). Just ask any wife…

]]> By: Pete Flynn http://www.techblog.co.za/2007/06/18/property-in-south-africa/comment-page-1/#comment-26798 Pete Flynn Mon, 18 Jun 2007 14:54:20 +0000 http://www.techblog.co.za/2007/06/18/property-in-south-africa/#comment-26798 As someone involved in the email debate here are my 2 cents :) ______________________________________________________________ I agree with all the sentiments below… (except some of them)... Wisdom never changes and the investor’s wisdom has always been that if you want security in investing you need to diversify. Property will always be an important part of a balanced portfolio. In the short to medium term I think commercial is a better bet than residential because of the SA GDP growth and those beautiful economic laws around supply and demand. Residential % growth is going to be capped simply due to affordability in my view. R 15 k p/m on a mortgage is simply out of the hands of most young couples. One thing more on supply/demand though. This could mean that property owners become more sticky to sell – it is a hassle to get a buyer who can get through all the credit act red tape. This in turn means that the supply (of willing sellers) goes down but the demand (buyers who can afford (but now not qualify)) stays constant (or even goes up)… this could actually drive properties on the market that are for sale up in price… Historically residential does around 13% (20 year average if I am not mistaken) - so its not a great investment, but it still beats inflation and along with all the tax incentives (no capital gains etc.) owning your own home still makes great financial sense to me. Of course we have all by now agreed that being “geared to your eye balls” is a bad idea. As someone involved in the email debate here are my 2 cents :)
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I agree with all the sentiments below… (except some of them)…

Wisdom never changes and the investor’s wisdom has always been that if you want security in investing you need to diversify. Property will always be an important part of a balanced portfolio. In the short to medium term I think commercial is a better bet than residential because of the SA GDP growth and those beautiful economic laws around supply and demand. Residential % growth is going to be capped simply due to affordability in my view. R 15 k p/m on a mortgage is simply out of the hands of most young couples.

One thing more on supply/demand though. This could mean that property owners become more sticky to sell – it is a hassle to get a buyer who can get through all the credit act red tape. This in turn means that the supply (of willing sellers) goes down but the demand (buyers who can afford (but now not qualify)) stays constant (or even goes up)… this could actually drive properties on the market that are for sale up in price…

Historically residential does around 13% (20 year average if I am not mistaken) - so its not a great investment, but it still beats inflation and along with all the tax incentives (no capital gains etc.) owning your own home still makes great financial sense to me.

Of course we have all by now agreed that being “geared to your eye balls” is a bad idea.

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