Owning property in SA | Financially more viable to rent than buy?

More home owners are struggling to pay up, given all the added costs of owning a home these days. It's driving more South Africans to rent instead of buying. Let's speak to property economist Erwin Rode about it. #dstv403

[@robintyson591]

I'm 64, my mother is 93. We both OWN our homes. NOTHING beats that when you get older.

[@mopailothatelo583]

Absolutely!

[@TravellingVineyard]

Just rent. You have an asset but no income 😕 from that asset.

[@mohamedagnaouy7713]

SA is Done

[@CritikillACClaimed]

@@TravellingVineyard and what happens when you lose your job AND have to rent? Bad advice lol

[@johnmajor9564]

@@CritikillACClaimed you have to service your loan as well.

[@confidencesibanda7841]

When you take a bond don't relax until its paid off, the sooner you get it paid off the better. The property is not yours until its paid off.

[@drjacovanniekerk]

I am sure all landlords would agree!

[@teachingwithtrash5417]

The problem is if you’re renting is you don’t have a place to grow old in… you can get evicted at any point and have to go through the pain of hunting and packing and moving

[@VR_27]

In Cape Town, factor in the levies, crazy apartment prices and the criminal level of once off legal and admin costs ( though that's a national problem) , it becomes impossible to buy in a middle class neighborhood on a middle class income..tragic.

[@bonganibongani]

Those were unfortunately not wise and definitely not honest words. South Africans, please buy as much profitable property as possible. South Africans need to own this country and land, by all means necessary!!

[@AskJax]

Well said

[@jjm2682]

This statement is based on what evidence?

[@denzel1877]

@@jjm2682 It is based on the fact that people who own property (landlords) are getting richer and the tenants are getting poorer with the constantly rising rents. happy?

[@johnmajor9564]

@@denzel1877 If you take out a 100% loan you have to pay interest, transaction costs and the loan itself. Add to that rates and your maintenance reserve (between 1,5 and 2% of the property value per year) you actually have to put money into your property. SA shares achieved an average return of 11,2% since 1995. No property in SA achieved that.

[@glenmash2363]

A house you live in is not an investment, it is a shelter. This is one of the biggest misconceptions with property.

[@alistairfrancis4626]

There is some logic to this, but we as South Africa lack the discipline to save and invest. Therefore buying a house is still the best option for majority of South Africans. Renting is for those people in the higher LSM who enjoys the pack up and go lifestyle.

[@johnmajor9564]

Or renting is for those who haven’t settled down yet…like your realistic perspective of South Africans ❤️😂

[@sylviaphalatsi52]

They don't want people to own properties

[@mhlengintswane9052]

So true

[@Anonymous-td9iv]

@@mhlengintswane9052 no, he’s right

[@williampearson6299]

@@mhlengintswane9052 Why not build a house?

[@garagepie]

Kak man, go buy a house. Don't listen to this rubbish

[@ncisept5900]

Vele

[@sbonzama7013]

The last point is a bit problematic for me. This issue of "saving". Inflation is eating away your savings. Saving interest rates are not good. So I don't think you would be in a better position!

[@jjm2682]

You right. “Saving” would depend on what financial vehicle you use

[@johnmajor9564]

The SA share index achieved an average return of 11,2% since 1995. So no inflation is eating away my investments.

[@ncisept5900]

Buy a house, maybe not necessarily your dream home. But buy a house

[@Macedonia270]

In addition, if you rent, the ANC cannot steal your property....

[@IAMALLMUSIC]

Underrated comment. People don't think bout this factor and the general state of the country. In 20 years SA could be Zimbabwe! Then what would your precious little house be worth?

[@andyballard1883]

The Prof was talking about negative gearing in regards to paying off a bond.. but the other big incentive to rent if you have the cash is that if you put say 10 million rand in the bank you would earn maybe 8% interest which would cover your rental outgoing withouts tying up your money in a property asset which is not going to rise in value over the next few years

[@johnmajor9564]

If you take out a 100% loan you have to pay interest, transaction costs and the loan itself. Add to that rates and your maintenance reserve (between 1,5 and 2% of the property value per year) you actually have to put money into your property. Far more than you would have to pay rent. SA shares achieved an average return of 11,2% since 1995. No property in SA achieved that.

[@sakhiledlamini4668]

The Transfer Fees alone, u already in a Dark Hole. Rent for life. Liquidity is King

[@MJ31579]

Owning is a long term game

[@bence8642]

You will own nothing and you will be happy??

[@onkerudah5619]

Only a few woke ones know this . . . I

[@RG-jr8ym]

Lots of people scratching their heads with one...

[@R33GAN]

Great reset loading.....

[@TravellingVineyard]

Yes you Muppet. You invest the money, shares, bonds etc That will outperform a house as an investment. But I really don't expect you to understand.

[@scottgordon1781]

Bought my house 27 years ago @ 25% interest , R2500 / month , now R24 k , what my neighbours place went for , mine is slightly nicer . Had my time with renting , for ever at the vagaries of the landlord . I got a nice place in a good suburb . Might make myself a small flatlet alongside , rent out the house , paid for in 3 years :-) I expect to have spent the same on going off grid as I paid for the house . Free electricity in 5-7 years ? No cuts . At current electricity costs . LOL , I bought for R180 , now R2.5 m :-) very successful countries , try and buy an home there . :-) R7m +- Almost same as here . Ok , so one pays the balance into ....what exactly . Not bitcoin I hope :-) ? Beating inflation is the goal .

[@GeorgeOfTheJungle.]

100% CORRECT SIR - You nailed it - People can see 5 years ahead in SA - very very negative for the property market.

[@glenmash2363]

I actually do not believe the property market in South Africa is cyclical, it seems to follow a very irregular pattern influenced by many factors.

[@Noka227]

Haha, no landlord would allow you to rent 5 years straight without escalating rent. The only way is to house hop and you are probably going to get significantly less house for your money or worse location if you want to keep the same size house. There is no silver bullet, no cheap tricks, nobody is going to make you rich while they make a loss.

[@sihlemasondo2898]

Switzerland is 1st world we are 3red world we cant compare let's own our property

[@mbusisishi6765]

Short-sighted unvestor view Even with those unfavourable economic conditions, with buying u're still paying towards your OWN property. The thought of leaving one or two paid up properties fir your offsprung makes it all WORTHwhile. For sime of us, its not about buying, sellig & repeang direct financial profits in our lifetime

[@garagepie]

Definitely

[@mbuyiselo1]

House repayment system is a scam. Imagine I brought my house for 630k 13 years ago. Paying 5k a month in average that Is R780k that I've paid so far but i still owe 540k.. imagine in 13 yesrs i only managed to pay 90k. The rest is interest. 690k interest.

[@peterharwa9472]

Yeah it's a scam. The same bank will give you a car loan for the smae amount and you would have been able to pay it off in 5 years.

[@wjg203]

It's called inflation and evaluing of the currency due to bad economy in a country. Look at the Zim Dollar how it lost it value.

[@confidencesibanda7841]

The mistake you made is that you thought you bought the property kanti its never yours until its paid up.

[@mbuyiselo1]

What I ended up doing was to rent the house out. Rent a flat. The house is now paying itself and paying my rent. But the banks are scamming us.

[@confidencesibanda7841]

@@mbuyiselo1 good idea that

[@SENFU-y9y]

The trick is to pay it off your bond quickly. Rents will ALWAYS go up with population and inflation growth. Don't rob yourself the chance to own a home while you can.

[@miavos3610]

Excellent.

[@williampearson6299]

Most people in rural areas build their own houses.

[@rationalthinker9181]

Because owning a house means you have bought part of South Africa Inc you are investing in SA. If SA was a share would you buy it personally I would not.

[@ObelixBarbatus]

Agreed. I have started selling my properties to become liberated from the screws put on the homeowner by municipalities and the socialist government.

[@williampearson6299]

That's a lie. Rather build your own house

[@vonganishaun98]

Buy and rent it out

[@IAMALLMUSIC]

This is 💯 correct

[@nathanlakey57]

Here’s the concern. The average South African doesn’t earn enough to afford their own assets. Never have I heard when a liability or an expense is better than an asset because of viability financially. Isn’t the economic structure that allows for that financial model the problem?

[@arthurporfirio5718]

Owning a home at the end of the day is everyones goal but paying if for +-20 years which is usually more than the actual price, hurts.

[@onkerudah5619]

"It takes about 10 years to build a power station" that was a punch line lol

[@truth-Hurts375]

Meet Stupid....

[@Macedonia270]

It takes the ANC 10 years to build a power station (that does not work)...It took the non-disabled people 4 years to build the ones that worked flawlessly for 50 years....

[@scottgordon1781]

Hilarious , the ANC has not built one that works yet :-) And cannot get coal to others . Watch for Chinese offers to build some :-)

[@mopailothatelo583]

Listen to him, you will sleep in your cars etc. South Africa does not have a proper and robust social housing system like in Europe. Even the US 🇺🇸 have done poorly in social housing, hence people turn their cars into houses.

[@clinthufkie3242]

Its not the system that's not robust, it's the lack of funding, look at the UK.

[@IAMALLMUSIC]

Sleep in your car why? You can always rent elsewhere, anywhere in the country easily!

[@immutablebones6215]

Unfortunately, the majority of the people still don't know the difference between assets and liabilities. This is the reason the gap between the rich and everyone else will keep growing. The minute he mentioned 'saving', I knew he was bluffing. He's not a real investor. He still talks about a property he bought decades ago.

[@comrade916]

Germany is successful economically, but that has nothing to do with property ownership. Some Germans don't buy property because they are renting because their monthly rent is controlled by the state. Why would someone take a risk of ownership and devaluation if you're guaranteed a small rent increase annually..?

[@sihlemasondo2898]

" I would not sell a house unless I have financial problems" u hear wat he said dont be fooled ownership is key

[@soniabule9089]

Don't sell the house if it's paid off. holding on to a property under fresh finance that you will end up paying 3x more by the time you pay off is better to let it go. the best is top rent a cheaper property, save money towards buyer a house cash - it will save you on interest. especially in SA amod all the economic woes we are facing. otherwise its better to pay it off very quickly to enjoy the benefits of owning your own house

[@sihlemasondo2898]

@@soniabule9089 that's true pay up.quickly and enjoy

[@ZA_POLLS]

WHY IS SOUTH AFRICAN RESERVE BANK NOT DECLARING A RECESSION WE HAVE AN INCOMPETANT GOVERNMENT ECONOMICAL GROWTH IS SLOWING DOWN THAT 'S A SIGN OF A RECESSION UNEMPLOYMENT RATE IN GROWING

[@katisop5991]

Have 1 house that you can do whatever you want with. Other property no thanks. If someone sues you for depreciation when your insurer repairs their RRCullinan, or for spilling coffee on their albino alligator Kelly bag... property records are public.

[@mazibukomail]

When you own property, you own land.

[@clinthufkie3242]

Nope, government owns the land, you just own the bricks.

[@cavbrown2939]

Incorrect. Government can expropriate 'your' land

[@mazibukomail]

@@clinthufkie3242 are you saying farmers only own the structures and not the land?

[@BlessingMbalaka]

So ownership is a bad idea and rental bondage is a bad investment? I don't agree with his reasoning honestly.

[@eeddddyy8877]

This old man is misguiding people. If you can invest in property go ahead... Own property 🏠 and forget about cars 😹

[@shafiyaalgiquadra1105]

Full speed ahead, said Klaus in jubilation.

[@olafnilsen1641]

Haraam

[@anumanuva2431]

Eet zee bugz

[@jodylgtv]

So blow your money in your youth. Own nothing. Rely on THIS government in your old age ...are you high!!

[@lindiedelange3801]

In your old age you won’t be able to afford the taxes (monthly municipal) on your home, or the electricity, and upkeep 🤷🏻‍♀️ I see it often!

[@drjacovanniekerk]

Very high! Fully agree.

[@bebeled6955]

​@@lindiedelange3801, So how on earth will one then afford rent?

[@lindiwemvelase_]

With the South African Economy....its best to buy your home.....At least by retirement age you have a paid up home....have an option to rent out your property should you wish to move to a retirement village

[@mopailothatelo583]

I rather buy a property, pay it off as quickly as possible, rather than sleeping under bridges after retirement. Americans live on tent cities, side walks due to high rent prices. If you can afford, buy as much as you could.

[@soniabule9089]

pay it off quickly is better

[@franmdleleni6520]

Yep

[@peterkoutsis2780]

How many Swiss nationals are renting. Regards

[@robintyson591]

58%

[@TravellingVineyard]

And Germans.

[@bngmnh3583]

'By 2030 you'll own nothing & you'll be happy' - Klaus Schwab

[@devoncrowe2184]

What about all the ones the rural areas, they don't have title deeds ?

[@williampearson6299]

Exactly. Most people in rural SA build their own homes.

[@ncamiosibusisoshelembe5956]

The is no wisdom in this, if you do not own a home, as soon you loose your job ur on the streets, with your kids.

[@tshililoclaudinahmugovheli5793]

6:50 by now you should have paid off your mortgage loan.

[@Justin-pd2bj]

When factoring the payments involved in owning a property, it's better to rent and investing your money elsewhere. Think about levies, bond transfers, 10% deposit, interest payments to the bank, maintenance fees, and so much more. If you are not disciplined about your money, its better to buy a property but if you're disciplined, better to rent and invest your money elsewhere

[@DrTT.DurDoc]

Who are the Swiss and German citizens renting from?

[@raoulduke1914]

no they're buying because R19 to the Euro

[@thokomasango2294]

There's no clarity here 🤔

[@wjg203]

Unfortunately this video is generalizing. You have property owner who live in their property and then you have Investors who rent the properties out. If you earn a salary and is a taxpayer you should own a property then utilize your tax benefits with regards to you income and expense for the property which is perfectly legal provided that it's a investment property. Ther simply isn't a better investment than property as long as you bought the property for a good price. Property is the only investment that you can lend money for and create a income from plus earn a income while you sleep. Everybody needs a home over their head. Everybody need security long term. I know of many investors that earn more income from Property than they earn at their full-time job. I don't know of any good investment currently that will provide a good return in current economic pressures. Your investment might appear to have grown but the value of the currency would be worth far less meaning you actually lost money and have no security.

[@101dendroaspis]

You will own nothing and you will be happy, ne?

[@RG-jr8ym]

Its Sunday evening and you going to make some people scratch their heads with this one...lol

[@garagepie]

This property analyst doesn't own investment property 🤣🤣🤣

[@volgantifriebus9549]

BRICS needs to start replacing the Rand it's holding the dollar up cut the Rand create a new currency backed by resources the Rand is a outdated currency

[@truth-Hurts375]

Meet stupid...how will a new currency make it cheaper to buy a house...stop talking rubbish.

[@volgantifriebus9549]

@@truth-Hurts375 Drop the Rand use a new currency or the USD the Rand is a dead currency and Africa is suffering because they refuse to innovative or change course

[@lerax5049]

You can hear in his response that his telling half-truths. You will own nothing and be happy bs

[@robintyson591]

You can hear the presenter crying in the background!

[@EinadManhoff]

Part of wef con you will own nothing and be happy

[@johndo3930]

If you paid rent at 15000 instead of an bond after 5 years we take for arguments sake 10% escalation after 5years you be paying R 24157 rent but still R20 000 bond so you could only put away the R5000 FOR THE FIRST 3 YEARS OR SO. And you still got 15 years to go.

[@IAMALLMUSIC]

Lol this is a idiotic comment.

[@nathanlakey57]

Don’t talk nonsense. If can afford to own a fixed asset. You would consider the option of paying off someone else’s bond. Your financial structuring is torrid into even make that suggestion.

[@Codydoggy]

You need a place to stay and there won’t be enough rentals

[@rynhardvil2231]

real bad advice from someone who owns more than one house, we need our own homes or you will have to work for the rest of your life to pay someone else to live in....

[@goodbarbenie5477]

Yep... it takes 10 years to build a power station and takes 15 years to destroy it South African style. Hahaa...just dont fix anything. Let it take care of itself. Is their motto.. Hahaa

[@AskJax]

You will own nothing and be happy 😏

[@johndo3930]

Buy your own property at least the one where you live , rentals keep on going up and up faster then earnings. My house is paid but I would not be able to rent my own house today. House might not keep up with inflation but neither does your income standard of living in this country is going down these guys only look at raw numbers that does not always reflect what's happening on the ground. Second properties that might be debatable. After 20 years its paid off inflation will make it easier to make payment as time goes by. Switzerland is a bad example there is rent control an landlord can not increase the rent with more then 40% of the inflation rate.

[@andrewswales1042]

Owning a property would be an investment but soon government will own all title deeds so rent,.

[@mbusisishi6765]

Givernment owning all title deeds? What do u mean? Source?

[@101dendroaspis]

@@mbusisishi6765 Land courts bill, Expropriation bill?

[@MusehanaH]

Rent from whom? 😉

[@fredperry523]

EWC - Expropriating Whiteys Capital !

[@MusehanaH]

@@fredperry523 , and here I was thinking it means Ending White Callousness...My bad 🙃

[@daphneelevasseur3832]

By 2030

[@truth-Hurts375]

What is there to argue about this???

[@franswelten4327]

Having a bond free property is fine, selling a property you swob it for Fiat money, printed shit, the best thinh is not talki G about property value, just steal money, where ever there is, very practical, yes, talking is sheep 😂

[@GreyMist123]

The world economic forum said, you will own nothing and you will be happy. Personally I'm happy we bought our house and won't spend the rest of our lives worrying about whether we'll still be able to live in the same place in 5 or 10 years.