Foreign buyers eyeing SA property

03 Nov 2011

The fall in the rand value against the US Dollar, British Pound and Euro in the past few months has rekindled overseas interest in SA property.

People all over the world are searching for safe havens for investing and South Africa with its stable banking system and growing economy is increasingly perceived as a good option in this regard.

According to Berry Everitt, managing director of Chas Everitt International Property Group, this has also raised the possibility of a significant boost to the local housing market.

He explains that since May, the value of the rand has shown a sharp decline that was bound to catch the attention of overseas investors, especially in the light of the economic distress in Europe.

People all over the world are searching for safe havens for investing and South Africa with its stable banking system and growing economy is increasingly perceived as a good option in this regard.

This is clearly reflected in the fact that at least 30 percent of the enquiries Chas Everitt receives now are from outside of South Africa.

Everitt says most of the enquiries come from the UK, the US, China and Germany. There is also interest from investors in some European and Asian countries, as well as Russia and the Middle East.

“Overseas property investors generally don’t intend to live in South Africa full-time.”

He says they are currently most interested in buy-to-let properties and second or holiday homes that they can acquire at good prices now and resell at a profit in the medium-term.

“If South Africa handles their growing interest correctly, it has the potential to significantly improve the housing market countrywide and boost the economy by helping to mop up the extra supply of homes that is keeping the lid on prices.”

He says one needs look to the US market to see the potential positive effect.

Foreign investment in US property has jumped 24 percent in the past year to US$82 billion and now accounts for 8 percent of all home sales, according to the US National Association of Realtors.

In holiday destinations such as South Florida, international buyers account for 25 percent of the market and their interest has also been a real tonic for the local construction industry with new home building showing a 20 percent rise in the three months to end-September.

Similar effects are now being observed in other markets popular with foreign investors including California and Arizona, which were particularly hard hit when the housing bubble burst and in New York, where an estimated 15 percent of sales are now being made to international buyers, he says.

Everitt says so noticeable is the positive influence of international buyers that two senators are now even sponsoring new legislation that, if passed, would mean that foreigners who spent US$500 000 on residential real estate would automatically qualify for a coveted US visa.

“South Africa might not need to go that far but we should certainly not be looking askance at overseas investment or trying to discourage it in any way.”

Readers' Comments Have a comment about this article? Email us now.

Email Print Share

Similar Articles

View all articles

Top Articles

View all articles
Top Articles
More property articles...

Newsletter

Get the latest property news in your inbox.
Select your options:

Your browser is out of date!

It looks like you are using an outdated version of Internet Explorer.

If you are using Internet Explorer 8 or higher, please verify that your Internet Explorer compatibility view settings are not enabled.

For the best browsing experience update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox.


Please contact our Customer Service Centre for further assistance. Tel. +27 (0)861 111 724