Day Zero's bubble bursting bonanza

dogbox2
The water crisis in Cape Town isn’t all doom and gloom.
I saw a newspaper headline this week that said, “Drought could damage property values.” This is excellent news for everyone who isn’t an estate agent or a homeowner who might be thinking of selling. I don’t own property in Cape Town because I never listened to my mother when I left school and became a journalist instead and now it’s too late.
I couldn’t afford to buy a place when I first came to the Mother City in 1998 to help start up e.tv news, so I became a serial renter. Then, in 2004, just when I thought I might be able to get a small place of my own, property prices went utterly berserk. Virtually overnight, estate agents went from vulpine Mazda-driving gin junkies to vulpine BMW-driving champagne junkies. Not all of them, obviously, but certainly the ones who scavenge along the Atlantic Seaboard.
Over the festive season Pam Golding sold property along this gilded seam of ocean frontage worth R167-million. That’s pretty damn festive. It was their busiest December ever. A parking bay was sold for R1.65-million.
The agency’s area manager said despite the water crisis they were still seeing “keen interest from buyers looking for trophy properties”. And why not? If foreigners with tiny willies can bag a lion as a trophy, why can’t they also bag a mansion in Clifton? Actually, many of the buyers are from Gauteng. A trophy house to go with the trophy wife, perhaps.
Since arriving in Cape Town I’ve been behind the curve in every successive property boom. Truth is, it’s just been one long endless sonic boom driven by a real estate industry gone insane with hubris and greed.
Owner: My place isn’t much but I’m hoping to get R700-thousand.
Agent: Don’t be ridiculous. There are people who will pay R3-million for it.
Owner: Are you on drugs?
Agent: Shut up and take the money.
And so the bar for entry was raised sharply and savagely, quickly outstripping the ability of workers, shirkers, revolutionaries and right-brained romantics to get a foot in the door. Hell, by the time the rapacious feeding frenzy had subsided to a dull roar, we couldn’t even get a toehold.
Now, thanks to the lack of divine intervention, things are looking up.
“Drought could damage property values.”
That headline, were it written by a well marinated subeditor with anarchist tendencies, might just as easily have read, “Drought could slash property prices to realistic levels.” But there are no more anarchist subeditors. In fact, there are no more subeditors. They’ve all been darted and sent to the knacker’s yard in the unholy name of cutting back on costs. Let me not get distracted.
The story started off well. There were no typos or grammatical errors. Perhaps there is one subeditor left, banished to a corner of the newsroom where he sits rotting quietly from prolonged exposure to weak grammar and strong alcohol.
However, before the paragraph was out, I was reeling and confused. Because I had been drinking? Perhaps. I prefer to blame the paragraph. Let’s see what you make of it.
“For as long as the Western Cape’s water situation remains unresolved, the property market could take a knock in the short term and first-time buyers could face even higher prices.”
Perhaps it is the alcohol. It has, after all, a bit of a reputation for interfering with one’s thought processes, especially those deployed to the common sense department.
I have become increasingly reluctant to read beyond the first paragraph of any news story. No good can come of it. It will leave you feeling homicidal or suicidal. Sometimes both. Most of the time I get by on a quick scan of the headlines. So it was with long teeth that I read further.
“The influx of property investors is expected to slow.” All well and good. I’ve never been a big fan of these people. They rarely live in their investments, preferring to leave them shuttered up and empty or rented out to nouveau riche white trash who made their money through contract killings, wine farms or medical aid schemes.
Right off the bat, the director of a real estate company said there was “little evidence” that the drought would affect “Cape Town’s buoyant property market”. He would say that, though, wouldn’t he? If you were thinking of buying a house in Cape Town, isn’t this the kind of reassurance you’d want to hear? As opposed to, say, reading a notice from the municipality that from April everyone in the city will be expected to defecate in a bag and wash themselves with sand.
It’s no secret that estate agents have their own unique conception of ethics and truth – a crack house is a renovator’s dream, a vibrant neighbourhood is one where the police and ambulance sirens play all night long and a slight sea view involves standing on the bog and leaning out of the window in the guest toilet.
Claiming the drought won’t affect the property market is like the black knight in Monty Python’s Holy Grail getting his arm chopped off and insisting that it’s just a flesh wound.
Perhaps sensing the need to dilute his denial with a dash of honesty, the director admitted that sales in the middle to upper end of the market might start to slow. “This means we’re not going to have as many affluent Joburgers and Durbanites driving demand for luxury property and prices could take a slight knock in the short term,” he conceded through clenched teeth.
Affluent Durbanites? Oxymorons notwithstanding, anyone properly born and bred in Durban isn’t driving demand for luxury property in Cape Town. They are driving to Blue Lagoon for a bunny or to the airport to emigrate to Australia.
Then he said something that had me scratching my head, bollocks and cat. Not all at once, obviously. He said that if the “double-figure capitalisation in property over the last two years is left unchecked, there is a risk that property values would lose touch with their underlying economic fundamentals and we’d end up in a bubble situation”.
The reporter, I imagine, reacted much like I did. A bit of slow nodding, some drooling, a vegetative state and then brain death. The reporter dragged himself back from the brink. Something had been troubling him from the start. Why would a water crisis mean even higher prices for first-time buyers?
“The first is the likely influx of people that we’re going to see coming to Cape Town to look for work, as our outlying rural and agricultural areas take strain.”
Either the subeditor blacked out at this point and deleted a bunch of words with his face or the reporter, like me, abandoned all hope of making sense of anything and went drinking. The story wrapped up with quotes from the regional head of another agency.
Hedging his bets like a true professional, he said it was too soon to say whether the crisis would affect people’s decisions to buy in Cape Town. “A contained situation for a few months will not impact the long-term desirability of living in Cape Town, but a prolonged situation would temporarily impact sentiment and valuations in the short term.”
It’s a sentence wringing its hands, drenched in false optimism and crippled with contradictions. For a start, the situation is nowhere near contained. If anything, we have a container situation. I don’t even have a bucket.
The chairman of a Western Cape property forum had the last word. “For now things are still good, but we expect that it might change for the worse as the industry is water dependent.” Nonsense. If anything, the real estate industry is tonic dependent.
Gin and water is an abomination.
Dogbox