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.
Print
