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The Price of Property

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Is the Price of Property too high?

Date Started: 2007-01-20
Date Concluded: 2007-04-05
This poll asked you about whether you thought that the price of purchasing Real Estate was too high. It examined the perceptions that the general public has about the escalating costs of buying property. We gave three options: 'Yes', 'No', and 'Unsure' and left the rest up to you. The poll showed that the vast majority of those who participated felt that the price of purchasing property was too high. The comments that were received showed that some simply felt the houses in the area are not worth the asking price. Others comtemplated what the overall result would be of prices that escalate beyond the means of the average person. In total 76 votes were counted and 95% of them voted 'Yes' (72 votes), 4% voted 'No' (3 votes) and 1% were Undecided on the issue (1 vote).

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Poll Background

Death by HangingOne cannot help passing thought on the cost of living in the South Africa of today. For most of us, the biggest asset (or liability) that we'll ever have is that of property. Currently there seems to be an ever-increasing price tag on real estate that makes us all worry and wonder if its such a good idea to purchase property afterall.

Houses in the Athlone and surrounding areas are rapidly approaching the R1million mark, while at the same time, the average income is growing at a much slower rate. StatsSA's latest estimate for the average salary (for people employed in the formal non-agricultural sector) was about R7200. According to online calculators, this would only qualify you for an estimated bond of about R190000 - even if two people decide to purchase a house together and this salary is doubled, it still only qualifies them for a bond of R380000.

A quick glance at the property section of this website alone, shows that there are few houses within the price range that (according to the calculators) can be afforded by the average salary. Property listings in local newspapers and on other websites show a similar trend.

The underlying message is bleak: The cost of buying a house is nearly beyond the grasp of the average South African.

A quick look at the trends on property sales on the StatsSA website show that the price of houses has increased by an estimated 11% while the increase in average earnings has only gone up by around 6%. This means that property prices are increasing at a faster rate than the average salary is, meaning that the cost of buying house is moving further away from the grasp of the average income earner.

Do you feel that the cost of property is too high? Or can the prices be justified?


Comments Received about the The Price of Property poll

The high property prices in Athlone is way out of proportion to what it is worth and is fuelled by greed. There is no way that a house in any Athlone suburb is worth a million rands because by and large the houses are poorly constructed and are very basic in what it offers in terms of facilities and gardens. But what is the answer to something that is spiralling out of control? Young married couples have almost no chance of buying their own homes for many years unless, Inshallah, there is a generous gift from wealthy parents!
Boeta Maan

The escalating housing costs in South Africa is marginalizing average income families and putting property ownership out of reach for most young adults as well. This has imminent political connotations - An increase in the "have not" column will ultimately result in pursuance of "left of centre" political parties' support in the future.
Anonymous

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