It's been raining a lot here (and it's predicted to continue for the next three days at least), which is a sign that the air quality will be on the mend. The rain here is different to rain elsewhere. It's exactly as Forrest Gump says: It's like they turn on the shower, or turn on the tap, and it just rains and rains, day and night, a steady downpour. Not drizzle, and not an outright cloudburst.
I woke up this morning, after going out last night, feeling as though I had a tobacco flavored cactus in my throat. Feels a bit better now.
Been getting a few comments that my blog is depressing. Sorry if it is. Good news is I will be pretty distracted by work (yay!) as from next week, so there will be less time and energy for theoretical obsessing.
The book I'm about to finish now is The Tipping Point. I highly recommend it.
I also watched a movie this evening called Kingdom of Heaven. It's an elaborate movie which makes one point quite clearly. God lives in your heart and your head, not in a city, or a church, or a country. Those who believe otherwise are easily swayed. That's possibly why we are so easily convinced to go to war, when the only war worth fighting is in our own hearts, and our own heads.
A warning for the fans of Star Wars. From what I have seen of the movie, Darth Vader only makes his appearance pretty close to the end. On the other hand, it is action packed and this last film does go out with a bang. Lots of carnage, even Yoda doesn't make it out without getting electrocuted.
And for those prone to depression, skip the part below.
Brent Oil: $50.59
Gold: $429.80
Johannesburg - A sharp increase in oil prices could have a devastating effect on the residential property market, the Absa group warned on Wednesday.
Jacques du Toit, a senior economist with Absa, said a sharp increase in the oil price is currently not a significant possibility, but "oil remains an unpredictable factor".
Crude oil prices spurted above $50 a barrel in Asian trading on Thursday despite a positive US inventory report and after the contract dipped to $48.38 a barrel on Wednesday.
Du Toit said an increase to $80 or more a barrel would cause a worldwide recession, which would set local inflation and interest rates soaring.
Absa said on Wednesday in its economic perspective for the second quarter of 2005 that it does not see the residential property market as a bubble market in general.
"But it is important to note that a collapse is always possible, whether there is a bubble or not, in the case of a huge economic shock.
"We believe the worst possible economic shock for the residential property market would be a sharp increase in the oil price."
Experts in the residential sector are expecting a soft landing for this market - which has been experiencing a slow-down in growth since November last year - should no serious external shock occur.
Between 1984 and 1986, prices of houses dropped significantly in nominal and real terms because of a sharp increase in interest rates, a poor economic outlook and political uncertainty.
Too expensive
The most important element in the slowing down of house prices is the affordability of housing, "which is already under pressure because of the sharp increase in house prices compared with a moderate increase in salaries".
Du Toit said buyers are therefore becoming resistant against high asking prices and there are indications that the gap between asking and selling prices is increasing with properties remaining on the market for longer before they are sold.
Du Toit said houses in Johannesburg were on the market for an average of 47 days in the period January to June last year before they were sold.
From July to December it took an average of 55 days to sell a house.
The average difference between asking and selling price in the first six months was R29 000, but in the second half of the year, this gap increased to R38 000.
However, Du Toit was still expecting positive real growth in prices in the residential property market for the sixth year in a row.
Lew Geffen, chairperson of Sotheby's International Realty in South Africa, said the madness of the property market last year reminded him of a stock exchange out of control, but it has settled down now.
"The residential property market is now in a state of perfect balance with an equal number of sellers and buyers."
He said the market was currently very healthy, where it had to stop and catch its breath.
Should prices have continued to grow at the rate of last year, the risk of an adjustment would have been much greater, he said.
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