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SA’s most popular suburbs for foreign property buyers

24 Aug 2018

Foreign ownership in the local property market has experienced an encouraging upsurge over the last several years, with an increase of 42% in January 2018 compared to the same period last year.

In Milnerton, Western Cape, foreign transactions have grown in Century City. This penthouse is selling for R16 million - click here to view more.

So while many would have expected to see a decline in the number of foreign buyers of late, these findings by data and analytics property group, Lightstone, indicate increased appetite and confidence in the South African property market.

“Gauteng and Cape Town are evidently at the top of the purchasing pile,” says Hayley Ivins-Downes, head of property at Lightstone. “Cape Town, due to its cosmopolitan ambiance and multi-cultural inclusiveness, and Gauteng because of the thriving industrial and business hubs which offer many employment opportunities.”

Lightstone transactional data shows that 83% of all foreign purchases are made in these two provinces.

“A surprising occurrence is that Gauteng is becoming increasingly popular and the Eastern Cape is also becoming more alluring to foreign buyers,” she says.

Western Cape tops the list

The current view of the percentage of property transfers in the higher value bands shows that the Western Cape is the top performer in the country, followed by Gauteng.

The R3 million to R4 million property value band in Gauteng has experienced a growth of 39% but a significant decrease in the above R4 million value band. The Western Cape in comparison has enjoyed the most growth in the R4 million value band and a negative growth in the R3 million to R4 million band.

Growth and popularity in the R2 million to R3 million value bands remains high for both provinces and the upper value band in the Western Cape will continue to grow in popularity, says Ivins-Downes.

SA’s most popular suburbs

Taking a closer look at transactional data within the provinces, Cape Town and Milnerton in the Western Cape, and Sandton and Johannesburg in Gauteng, are the highest growth areas, says Ivins-Downes.

The report indicates historically, Lonehill in Sandton, which used to be a popular choice amongst foreign investors has declined somewhat. Parkmore has now become popular and surprisingly Douglasdale has also shown an increase since 2016, she says.

“Looking at Greater Johannesburg, Gauteng, the foreign transaction growth in Parkhurst weakened, while Northcliff has become a very popular choice. Glenvista is shown to have increased in interest since 2015.”

In the Western Cape, Cape Town foreign interest is far wider spread geographically. “The growth in Sea Point which has been very popular over the last five years has declined, while Rondebosch has doubled in volume and Observatory, where new developments have tripled has become very popular.

“Kenilworth has also shown an increase in foreign investments since 2016. In Milnerton in the Western Cape, foreign transactions have grown in Century City. Table View continues to be a popular choice as it has in previous years.”

Earlier this year, Lightstone reported on the Western Cape Drought and how it had not deterred foreign investor interest in the province. The current view of the percentage of property transfers by province and purchase year is evident in this statement, says Ivins-Downes, where the Western Cape is the top performer in the country.

The province has shown a steady increase in foreign sales over the last five years, which is currently sitting at just over 7% of total sales to foreign buyers, she adds.

Ivins-Downs says that with our president’s focus on increasing investments from abroad and his talent for negotiations, more and more foreigners will look for purchasing opportunities in the coming months and years.

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