The (Other) Foreigners Are Coming…
SA home sellers can now expect to see more foreign buyers in the market once again – although this time around most will probably be looking for permanent residences close to business centres rather than holiday homes.
“In addition,” says Lew Geffen, chairman of Sotheby’s International Realty in SA, “most will probably not hail from the countries we traditionally associate most with foreign buyers, such as England and Germany, but rather from South America, Eastern Europe, other African countries and, of course, India and China.”
As a member of the BRICS grouping, he notes, SA is already acknowledged as one of the most important developing countries in the world, which are expected to exhibit twice as much economic growth as developed countries over the next 15 years.
“This of course makes it attractive to investors from developed countries, but at the same time, as the World Bank recently noted, companies and investors in the emerging markets themselves are currently playing a huge role in reshaping the global economy. And especially notable is the increase in South-South trade and investment – between SA and fellow BRICS members Brazil and India, for example.
“What is more, Africa with its wealth of commodities has gone from being the poorest region in the world 10 years ago to the second-fastest growing region in the world currently, and this year, the International Monetary Fund predicts, it will show economic growth of about 6%, the same as Asia. In the wake of this, SA is not only increasingly seen by overseas investors as the gateway to the huge African market, but is also benefiting from stronger ties with other Africa countries and the interest of the growing number of newly-wealthy African entrepreneurs.”
As a result of these shifts in economic activity, Geffen says, Sotheby’s International Realty has noted a slow but steady rise in the number of foreign entrepreneurs and executives taking up residence in SA over the past two years, “in keeping with the findings of the latest FNB Property Barometer, which shows that the percentage of total sales made to non-South African citizens has doubled since the second half of 2010”.
At the moment foreign buying still only accounts for between 4 and 5% of all home purchasing, he estimates, “but we expect it to increase substantially as the new world economic order takes shape, driven not so much as it was before by the weakness of the rand against major currencies such as a the pound and the euro, but by the exciting business and trade opportunities opening up in SA and Africa.”
As for what type of properties the new wave of foreign buyers are likely to favour, Geffen says: “Probably mostly upmarket cluster homes in small complexes, and the full range of homes available in gated estates, from luxury lock-up-and-go apartments right through to grand mansions, as long as the estate has excellent security and preferably a good school, shops and an office park close by.
“Proximity to an international airport and a major business or export centre will also be key, which points to an expansion of foreign investment beyond Cape Town and into Johannesburg, Durban, Port Elizabeth, East London and even smaller centres such as Richards Bay, Nelspruit and Polokwane.”
Issued By: Sotheby’s International Realty
*For more information – Call Lew Geffen on (011) 886-8070 or visit www.sothebysrealty.co.za