With Spring in the air, foreign tourists - and property investors - will soon be making their way to South Africa as the Northern Hemisphere winter starts to set in.
“This migration may be difficult for us to understand, given our local considerations about the economy, corruption and crime,” says Gerhard Kotzé, MD of the RealNet estate agency group, “but one just needs to consider the property value for money that is available in SA to appreciate the international interest in owning a second home here.”
According to recent report released by property data company Lightstone, that interest has shown a definite increase in recent times, he notes. “Foreign ownership of SA property was up 42% in January this year compared to January 2017, with Gauteng accounting for 47% of the transactions concluded by overseas buyers, and the Western Cape 36%.
“And we believe that trend is set to gather momentum as SA continues to develop its relationships with old and new trading and investment partners. President Ramaphosa and his economic envoys have already secured more than half of the $100bn foreign investment target he set earlier this year, and as that money starts flowing into the country, it is likely to catalyse even more investment by foreign private companies or entrepreneurs with plans to set up or grow businesses in SA and live, work and play here.”
The Lightstone report shows that the most popular price bracket for foreign buyers in Gauteng currently is R3m to R4m, and the most popular in Cape Town is R4m and more. “However, there is also strong demand in both regions for homes priced at R2m to R3m – which will still buy you a lot of home in SA compared to the UK or Europe,” says Kotzé.
“For example in Northcliff, which is currently the top pick of foreign buyers in Greater Johannesburg, the median home price is around R2.2m (about $152,000), for which one can buy a luxury three-bedroom apartment with stunning views or a four-bedroom family home with expansive gardens.”
He says that in Century City, the area that is currently attracting most foreign buyers in Greater Cape Town, the median home price is currently around R2.9m (or $200,000), for which one can acquire a luxury, fully-furnished, two-bedroom apartment in one of the city’s most sought-after live-work-and-play precincts.
“Add this type of value to our wonderful climate, wide-open spaces, friendly people, relaxed lifestyle and the rand’s favourable exchange rates against dollars, pounds and euros, and it’s clear that we have a property-plus-lifestyle offering quite enticing enough to actually prompt permanent relocation and investment into SA rather than just 'snowbird' buying - especially among those affluent British, European and Eastern investors for whom summer is always too short.”