Aug 22, 2025 · 52 min · 10 segments
Episode Overview: In this episode of Wait & Speak, I speak with John Loos about the signals shaping South Africa’s property market, from national trends and micro shifts to sentiment tracking…
John LoosGuest
Requier WaitHost
And John, from that learning, it must have been really exciting, as you mentioned, that bubble, housing bubble, and moving from when you started out focusing on the residential and the home loan market and the property market, how things evolved to where we are today? Are there specific features that stand out or things that you find really interesting from your experience over this period?
Long story as to why the The Saab shifted policy towards inflation targeting, didn't need the massively high interest rates that it had in the late 1990s.
But then you started to see, this was the first time in my life I'd experienced what I think we can safely call a bubble, when the madness set in.
um and it became something of a speculator's paradise you could make capital gains in a very short period of time uh through um you know buying and selling property relatively quickly because of the cheap money on offer and the and the massive capital growth nationally so there was a lot of speculative activity which drove this market overshoot then came other things as well the the unseasoned buyer obviously they they think that when there's massive capital gains that's the time to buy which often it's becoming less of a the time to buy is actually when the market's at its weakest probably in the late 1990s But this buying frenzy, a lot of buy to let buying through speculative, but just unseasoned buyers thinking that this is a great opportunity and getting caught out by the market right at the end of that boom.
And that's where your aspirant first time buyer sees these prices going up so rapidly that they start to fear that if they don't buy now, they'll never be able to afford it.
um banks were chasing market share like crazy and and and and growth they became used to growth and the their powers that be at the banks demanded more of the growth and so it just became a crazy frantic um growth drive and investment drive and and you know the market way overshot and it's it's kind of like where demand and supply theory goes wrong because as prices go up for a while it creates more demand not less, which is not how investment theory or supply and demand theory is supposed to work, but that's the irrationality of the human being.
And then it all ended in tears when we had that global oil price shock and food price shock up to 2008, which took interest rates up five percentage points, massive amounts of household indebtedness, and they just couldn't cope with that as interest rates hiking and the whole house of cards came tumbling down.
i think the since then well since then what we've seen on a national basis there have been pockets and i'll get into it later but but um naturally we've seen a very mediocre residential market ever since um reflective of a very mediocre and stagnating economy uh the bubble the the crazy uh bubble type behavior is long gone um and now we we're dependent on interest rate fluctuations and economic growth fluctuations of which there's not much of either um and so we've got this this mediocre market price growth is not keeping up with general inflation so there's been the slow correction since about the middle of last decade in not only the the residential but commercial property market as well And what we've learned since, and it's reflected in the property markets, is that we really thought naively that we were quite cool in terms of economic growth prior to the global financial crisis.
and some thought this was a positive structural changes taking place it wasn't unfortunately what we know now is it was just some very easy stimulus levers that got pulled we had these very high interest rates in the 90s we could cut them we could have massive um borrowing to to drive economic growth for a short while but once you become a highly indebted country in the commercial sector in the household sector and in government sector now You've got nowhere else to go.
And now we sit with, you know, what does Warren Buffett say? When the tide goes out, we can see who's been swimming naked.
And John, from that learning, it must have been really exciting, as you mentioned, that bubble, housing bubble, and moving from when you started out focusing on the residential and the home loan market and the property market, how things evolved to where we are today? Are there specific features that stand out or things that you find really interesting from your experience over this period?
Long story as to why the The Saab shifted policy towards inflation targeting, didn't need the massively high interest rates that it had in the late 1990s.
But then you started to see, this was the first time in my life I'd experienced what I think we can safely call a bubble, when the madness set in.
um and it became something of a speculator's paradise you could make capital gains in a very short period of time uh through um you know buying and selling property relatively quickly because of the cheap money on offer and the and the massive capital growth nationally so there was a lot of speculative activity which drove this market overshoot then came other things as well the the unseasoned buyer obviously they they think that when there's massive capital gains that's the time to buy which often it's becoming less of a the time to buy is actually when the market's at its weakest probably in the late 1990s But this buying frenzy, a lot of buy to let buying through speculative, but just unseasoned buyers thinking that this is a great opportunity and getting caught out by the market right at the end of that boom.
And that's where your aspirant first time buyer sees these prices going up so rapidly that they start to fear that if they don't buy now, they'll never be able to afford it.
um banks were chasing market share like crazy and and and and growth they became used to growth and the their powers that be at the banks demanded more of the growth and so it just became a crazy frantic um growth drive and investment drive and and you know the market way overshot and it's it's kind of like where demand and supply theory goes wrong because as prices go up for a while it creates more demand not less, which is not how investment theory or supply and demand theory is supposed to work, but that's the irrationality of the human being.
And then it all ended in tears when we had that global oil price shock and food price shock up to 2008, which took interest rates up five percentage points, massive amounts of household indebtedness, and they just couldn't cope with that as interest rates hiking and the whole house of cards came tumbling down.
i think the since then well since then what we've seen on a national basis there have been pockets and i'll get into it later but but um naturally we've seen a very mediocre residential market ever since um reflective of a very mediocre and stagnating economy uh the bubble the the crazy uh bubble type behavior is long gone um and now we we're dependent on interest rate fluctuations and economic growth fluctuations of which there's not much of either um and so we've got this this mediocre market price growth is not keeping up with general inflation so there's been the slow correction since about the middle of last decade in not only the the residential but commercial property market as well And what we've learned since, and it's reflected in the property markets, is that we really thought naively that we were quite cool in terms of economic growth prior to the global financial crisis.
and some thought this was a positive structural changes taking place it wasn't unfortunately what we know now is it was just some very easy stimulus levers that got pulled we had these very high interest rates in the 90s we could cut them we could have massive um borrowing to to drive economic growth for a short while but once you become a highly indebted country in the commercial sector in the household sector and in government sector now You've got nowhere else to go.
And now we sit with, you know, what does Warren Buffett say? When the tide goes out, we can see who's been swimming naked.
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