Why the hell all the doom and gloom about falling house prices? Doom and gloom for whom? Most definitely not for the all-but-non-existent first-time buyers, new families or poor (and even not-so-poor) that looked on in horror at the way prices have spiralled beyond reach in recent years.

Falling house prices are great news if you don't yet own a home. As most South Africans aren't homeowners, it stands to reason that it's not at all obvious that the current decline is a bad thing.

Of course, there are losers — estate agents, property developers, bankers who want us to have plenty of debt to earn interest on, anyone exiting the market as opposed to buying another house, those 'trading down' and reckless borrowers who bet on the boom-times to last forever.

Lower prices are good for almost everyone except those who view residential property as an investment rather than a shelter. And herein lies the problem. In this country people seem to view their home equity as a replacement for savings. If it weren't for forced monthly repayments, most would have no investments at all. See your home for what it is — a place to live — and you'll scoff at falling prices. And don't keep all your eggs in one basket! Property as an investment is not all it's cracked up to be (click here to see how property compares to cash and shares as an investment).

Falling house prices are good for everyone who doesn't own a house and even for some who do. Let's say you and your husband live in a flat worth R500 000. Baby is on her way and you want to move to a larger house of R1-million. That's a difference of R500 000. However, if prices fall by 50 percent your upgrade will set you back only R250 000!

Is it a bad thing if someone loses their house? We instinctively answer 'yes', but for every foreclosure or homeowner forced to sell because they can't afford their repayments there's a buyer who got a great deal.

Falling house prices are not bad per se. There are winners and there are losers and I won't be surprised if the winners far outnumber the losers.

When will property turn a corner?

The reports are confusing to say the least. Scan the freshest articles on iafrica.com's property webpage and you'll see statements ranging from 'It is now almost certainly the right time to buy a house' to 'It's too early to reinvest in property'.

More than 2400 years ago Buddha said something very true and relevant when faced with conflicting statements like these:

"Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense."

So, what's the story? Is a recovery in the residential property market imminent or is the worst yet to come? The only really honest answer is: 'I don't know'.

Anyways, why does it matter when property will turn? If you want to buy property, instead of asking whether it's a good time to buy or not, rather ask yourself if you can comfortably afford the repayments, even after taking into account an unexpected rate hike or three (or four?). If your answer is 'yes', and you've got about 20 percent saved up as a deposit, then jump right in! There's a glut of properties on the market and you'll be spoiled for choice.

If your answer is 'no', or you're uncertain, then buying property is not for you, no matter what the state of the market.

Has Kabous lost the plot, or do you agree? Leave a comment below...

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