Investors are filtering back
Cape Town a key focus as foreigners return to the sales market, writes Peta Tomlinson
South Africa tends to get a bad rap, what with its political and social unrest, and lately, industrial action. Even Standard and Poor's downgraded the sovereign rating of Africa's largest economy, amid uncertainty linked to strikes and rising social tension.
Not surprisingly, foreigners have shied away from South African property markets but, despite the bad news, data shows they are now filtering back, with Cape Town a key focus.
While the latest First National Bank (FNB) property barometer acknowledges "some heightened investor concern regarding South Africa's future stability and prosperity", it found that this has not had a noticeable negative impact on the property market. With regard to foreign buyers, John Loos, FNB household and property sector strategist, says there had been a slight drop in the third quarter data. "As yet, we would not draw any hard and fast conclusions based on one quarter's data, but it is something to watch," he says.
Stuart Murray, a consultant on economic matters to Pam Golding Properties, a leading South African real estate group, says South Africa's domestic problems "widely reported in foreign media", coupled with austerity measures in their own country, were impacting on Europeans, the traditional purchasers of residential property in South Africa. "Nevertheless, foreign buyers still account for 3 to 4 per cent of total residential buying, although this is way down on the 6.5 per cent experienced in the heady years of 2008/2009," he says.
One purchaser, from Germany, recently paid 30 million rand (HK$26.73 million) for a home in Bantry Bay.
Basil Moraitis, Pam Golding Properties' area manager for the Atlantic Seaboard and City Bowl, agreed that the number of international buyers remains relatively low. "However, they are starting to emerge in stronger numbers in more affordable price brackets than was typically their focus in previous years."
