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Thread: House Shortage

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    House Shortage

    Hi everyone, herewith my first post for the year.
    House prices might decline.......I don't think so

    South Africa is in for a big housing shortage
    By Coert Coetzee


    This week I heard that a development that was supposed to be completed by the end of March has been postponed to the end of the year. News like this is common these days, and apparently the reason is that city councils cannot supply the required services, due to a lack of infrastructure. Many municipalities are technically bankrupt and simply don’t have the money to do essential maintenance, never mind money for expansion. That’s why projects get postponed, or even cancelled. It’s actually ironic that problems like this exist in a modern country. And it’s not due to economic conditions that we have these problems – I think the cause is inadequate government.

    Our country has suffered severely under power cuts for the last while. This is paralysing the economy. Even at Treoc we are experiencing the problem in our offices, which are not able to be 100% productive. Our problem starts at the switchboards, which run on electricity; and then of course all our other equipment, like computers and fax machines, becomes unusable as well. While we’re on the topic, I’d like to ask our members to be understanding about the problem, and know that if you can’t get through on the switchboard it doesn’t mean we are closed or lazy. It means the power is off!

    Do you know what the result of the above-mentioned problems is? Fewer houses are being built than are needed for the fastest-growing middle-class in the world. Yes, it’s true. South Africa’s middle-class is the fastest growing in the world, and we will soon have an enormous housing shortage if things continue like this. I see no improvement to the situation in the immediate future.

    What does this mean for the Treoc investor who buys and keeps his properties? Money, plenty of money! With any commodity, when demand exceeds supply, there is just one way for the value to go – and that’s up. Houses are going to become unaffordably expensive for most people. In fact, this is already starting to happen.

    Most economists are predicting low growth for houses in the year ahead, but as usual, most economists are basing their predictions solely on technical analyses. They don’t usually take fundamental aspects such as poorly managed municipalities or a poorly managed Eskom into consideration when they peer into their crystal balls. That’s why the property explosion of 2004 caught them unawares. That’s why they called it a bubble at the time. If you don’t understand something, you’ll be afraid of it, and they were afraid of the so-called “bubble” – which, in the end, never burst.

    Every week I meet people on my seminars who tell me that they could kick themselves for not having attended my seminars in 2003 and consequently having missed the 32% growth in house prices. It’s a lot more expensive for them to enter the market as property investors now. Of course, many of our investors in the Treoc group who did start buying in 2003 and still have their properties today are smiling broadly, and they will meet the next growth phase with enthusiasm. To those who haven’t yet done anything and are still “waiting and seeing”, I’d like to say: get yourself onto this property bus now, or else you’ll once again miss the next growth phase. You already missed the party in 2004, and if you don’t take action now, you’ll miss the next party too!

    Last Sunday at church in Somerset West someone asked me whether I thought it would be worth his while to fly to Gauteng to buy properties. I want to share with you the answer I gave him, because I think a lot of you might also be wondering where to find the right areas and properties.

    At Treoc we have a dedicated company, Treoc Property Exchange, which has just one goal: to find properties for our Platinum members. They are continually investigating new areas, and as soon as they have identified the right areas they look for properties for us. The properties that they find are all above-average performers that automatically qualify for our exclusive rental pool. These properties are usually also bought with zero deposit. We call these properties Treoc-type Properties and it has now been proven over and over again that this type of property beats the year-on-year market average in terms of capital growth and rental demand.

    The man at church wanted to know what he had to do to also be able to buy from Treoc Property Exchange. The answer is: become part of the Treoc Way. If you are already a Treoc member, but are not aware of all our services and products, I suggest that you immediately make contact with the Treoc investors’ club nearest you, because you are missing big opportunities.

    Happy House Hunting!

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    Silver Member Vincent's Avatar
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    Hi Quinn,
    A question, "Besides owning your own business, are you a platinum or gold member of Treoc and do you subscribe to his method of refinancing?" I went to an intro seminar recently and found the talk interesting, but a little heavy on the selling of the membership. Nevertheless, I still do receive his newsletter, which makes for interesting reading.
    Vincent Marino
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    Hi Vincent,
    I am a platinum member and have been since 2005.
    I do subscribe to their methods but I believe the market has changed and investment should be approached differently. I do believe in refinancing and if you are carefull there is still a lot of money to be made.

    I have come up with a different approach to investing and if you contact me I ll tell you more.

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    Site Caretaker Dave A's Avatar
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    Coert presents a convincing argument. I was trying to figure out just what it was that had me going "something's missing." Took me a while.

    Coert's bang on the money about applying the principle of supply and demand. Unfortunately, property isn't the only dynamic in the formula. So are people and money.

    Interest rates rise, money gets tight, buyers dry up, forced sellers enter the mix... There have been set backs before. I wonder how many of Coert's disciples who have refinanced to the max are on a pretty rough ride just now?

    However, if you're in for the long run and can absorb the bumps - no problem. The guy has a great strategy.
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member Chatmaster's Avatar
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    Am I wrong in seeing things a little different? My view on the property market is that as long as it is cheaper to buy an existing house than to build one, the odds are that the property prices should still increase?

    I am definitely no expert in property prices but I was shocked to see just how expensive it is to build a house these days. The price/m2 is far more than buying an existing house. I know it is actually unrelated but as far as I know there was a time a few years ago when house prices was so high that it was cheaper to build.

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