The Reserve Bank cut the repo rate by 25bps & just like clockwork, the rats who are paid to sell houses are encouraging people to go out & buy
The usual "influencers"/ estate agents/ mortgage brokers/ banks/ loan sharks/ excavator salesmen
Here's a useful MEGA property thread:
The usual "influencers"/ estate agents/ mortgage brokers/ banks/ loan sharks/ excavator salesmen
Here's a useful MEGA property thread:
1. Does interest rates being low mean houses are automatically cheaper?
No. The costs of financing an asset is independent of the cost of the asset.
No. The costs of financing an asset is independent of the cost of the asset.
2. Okay, are house prices declining? Will they get even cheaper?
Yes, most house prices are declining. All trends point to them becoming even cheaper. Houses prices between R250k - R700k are holding their value while luxury houses are much cheaper.
Yes, most house prices are declining. All trends point to them becoming even cheaper. Houses prices between R250k - R700k are holding their value while luxury houses are much cheaper.
3. Can I lock-in the interest rate?
Yes - although in practice you could actually end up worse off Here's why:
Yes - although in practice you could actually end up worse off Here's why:
4. Okay but interest rates are low AND the bank told me I can afford it.
Yes - although qualifying is different to affordability. Qualifying means you can pay the bank. Affordability means you can pay all the costs of home ownership.
Yes - although qualifying is different to affordability. Qualifying means you can pay the bank. Affordability means you can pay all the costs of home ownership.
5. Once property prices start to bottom out, should I think about buying a house that's a bit cheaper paying extra into it?
Absolutely, yes. Paying a little extra goes a LONG way.
Absolutely, yes. Paying a little extra goes a LONG way.
6. When will property prices start to bottom out?
In a perfect world, rates cuts would quickly provide support for house prices. Unfortunately, SA has massive structural issues & it could be worth holding out until 2021 (unless you find a hot bargain)
In a perfect world, rates cuts would quickly provide support for house prices. Unfortunately, SA has massive structural issues & it could be worth holding out until 2021 (unless you find a hot bargain)
7. Why are banks so aggressive in trying to lend me money when rates are low? Surely they make less money.
Exactly They make less money so they have to lend you more of it. Here's how it works
Exactly They make less money so they have to lend you more of it. Here's how it works
8. Who else needs cash during this time?
Banks are under pressure to extend their loan books & increase liquidity & also have heavy drawdowns from large corporate clients #TeamBrokeBoiz
Banks are under pressure to extend their loan books & increase liquidity & also have heavy drawdowns from large corporate clients #TeamBrokeBoiz
9. Buying a house is complex (see what I did there?) during a pandemic, should I invest in a property stokvel instead?
Glad you asked, here's a thread:
Glad you asked, here's a thread:
10. Is it a good idea to make big ticket purchases during a pandemic?
Personally, I would seriously think about being overweight cash.
Personally, I would seriously think about being overweight cash.
11. Why do banks force people to pay off home loans over 20 years but you can pay off a car over 5 years?
Banks don't force you to stay confined to that payment period. Read this:
Banks don't force you to stay confined to that payment period. Read this:
12. Is a house an asset.
YES
YES
Shout-out for making it to the end! I appreciate you.
The costs of owning a home in SA
