[I had an interesting chat today with a manager I did some work for some years ago. I wrote a system for him to deal with the financials relating to repossessed homes.

In the news you will hear the ANC constantly talking about their mythical 6% GDP growth, etc and how the country is better off than ever before. Some weeks ago, I said that it appears as if house prices are either slowing down, and correcting, or maybe they are even topping out. Well, listen to what this manager told me.

The department he worked in, for whom I wrote the system dealing with repossed homes was later shut down.

He moved elsewhere, and dealt with arrears. He told me today that starting in December 2004, and going right through 2005, that there were more and more people defaulting on homeloans. He said there were hundreds of new defaulters every month.

He is convinced that in the near future they will have to reopen the department which deals with repossessed homes.

Now, remember this: Currently, we have the lowest interest rates South Africa has had in over 20 years! The talk is that interest rates cannot go lower and that the next move, perhaps some time in 2006, will be to start pushing interest rates up, by say 0.5%.

Now, if people are already starting to default, and if house prices are already peaking, or near peaking, then an interest rate change could cause some serious problems for some people.

So the next interest rate move will be fascinating to watch. Jan]