Strong foreign interest in SA property

Despite the precariousness of the world’s economy, there is still a lot of foreign interest in South African property, with investors from the United Kingdom, Germany, Australia and even the USA eyeing property here.

A recent analysis of traffic on the Lew Geffen Sotheby’s International Realty website shows that the number of international visits to the website is on the up.

The French seem to be the most interested in property in South Africa, with the number of French visitors to the site up by 62%. The number of website visits from people in Australia, Canada and the UK is also up by 52%, 32% and 23% respectively.

Visits by Germans have increased by 14% and American visitors have also increased by 10%.
Properties in the bracket of between R3m to R12m get the most hits from international visitors showing that it’s mainly up-market holiday homes that foreigners are after. There is also growing interest in smaller, lock-up-and-go properties in metropolitan areas suggesting that corporate travellers want a little place to call home when they are in the country on business rather than staying in a hotel.

“There has always been significant interest in SA property from Europeans, particularly people from the United Kingdom. Generally, they buy properties here for holiday purposes or as retirement homes.

“Interest is now more widespread, with people from all over the world looking into buying property here. Where it was once primarily luxury holiday homes in coastal regions that were being snapped up by foreigners, we are seeing an increase in the number of smaller properties in the metro areas of Johannesburg and Cape Town being sold to international investors,” says Jason Rohde, CEO of Lew Geffen Sotheby’s International Realty South Africa.

Rohde points out though that while foreign interest in SA property is growing, overseas buyers are more cautious about actually taking the plunge.

“While it is only the wealthy who are able to afford to buy homes overseas, they are not entirely untouched by economic factors so they aren’t as ready to jump into actually buying property as they perhaps were two years ago. The strengthening of the rand means that the foreigners’ purchasing power isn’t quite what it was either.

“As a result, foreign buyers are more price-sensitive and are looking for value for money. As with local investors, they are also weighing up their options more carefully, taking into account other factors such as security. The home has got to meet their criteria, including price, in order for them to make a commitment.

“Generally speaking, there is an oversupply of housing stock across most price categories, so it is essentially a buyers’ market. Sellers must be realistic about the asking price on their properties if they want to ensure a sale. They must present a fair deal,” Rohde advises.

Dr Andrew Golding, CE of the Pam Golding Property (PGP) group, says South Africa remains a sought-after property investment location among high net worth German investors.

“While the Soccer World Cup has focused increasing worldwide attention on South Africa, the fact is that even amid the global economic downturn South Africa has remained prominently on the radar of German property investors as a market to watch. Over the past year, Gaby Moëssner, who represents PGP in Germany, has seen increasing interest among German investors in leisure or holiday homes in South Africa.

“During this period their main areas of interest for such homes include the Eastern Cape with its exceptional value for money, the Garden Route, and the Cape and its popular Winelands region, particularly its scenic golf estates.

"As a rule and understandably, overseas buyers do not make quick decisions regarding property investment in overseas countries, including South Africa. And the Soccer World Cup – being a once-off event – may not necessarily influence their investment decision, although it certainly is considerably raising our country's profile abroad.

"Interestingly we've noted that several PGP clients in Germany have recently sold their properties in Spain and are looking to invest elsewhere. Certainly with our beautiful coastlines, spectacular natural scenery and appealing weather conditions during the harsh European winter months, South Africa can compete with other countries, such as Croatia and Turkey, which are currently of high interest among investors wishing to acquire holiday homes," adds Dr Golding.

Eugene Brink