Published on 14 October 2005 at 06:26 pm
Filed under: Africa:- South Africa Property Guides » South Africa a Guide for Property Investors
The impressive and substantial annual profits enjoyed by property investors and second homers in South Africa in recent years had a great deal to do with the weakness of the local currency.
Yet while the size of recent annual gains may be unsustainable over the long term, the attraction of the South African real estate market remains incredible strong for a number of key reasons.
Firstly, the government of South Africa are well aware that the ongoing strength of their country’s real estate market is critical for South Africa’s economic growth and are open to foreign investment. Secondly, South Africa is a naturally incredibly attractive country for many people for many reasons creating sustainable overseas interest in property purchase. And thirdly, the long term predictions for the improvement of conditions in South Africa for the local population will slowly lead to domestic demand for property for sale and more quality accommodation to rent.
The political climate in South Africa today is stable and likely to remain so. The economy of the country is considered to be emerging and ‘middle-income’ - at its core is a wealth of natural resources and leading it forward are strong tourism, financial, legal, communications and transport sectors.
For the long term economic success of South Africa, foreign investment is critical. The surge in overseas wealth invested into the country since the property boom began a few years ago alerted the government to the fact that foreign investment into real estate is highly desirable and should be encouraged which makes buying property in South Africa quite a low risk investment decision.
Legally speaking South Africa has a well developed property buyer protection scheme and the best deeds registration system in the world which further reduces an investor’s risk when buying into the market.
In terms of the practical attraction of South Africa - it is a vast land of stunning contrasts offering the home owner, investor, retiree, expatriate or tourist exceptional scenery such as vast wildlife filled land expanses, breathtaking mountains and stunning coastlines as well as vibrant and modern cities, culture, history, fine wine and dining, sporting attractions and activities, unspoilt beaches, great nightlife, peace, quiet and great spring and summer time weather.
Because of the short time difference and reverse seasons between Europe and South Africa it has become a very popular destination for Northern and Western Europeans. Furthermore the year round demand for accommodation to rent from tourists is massive, the demand for second homes is growing and the expatriate retirement population in South Africa has already surged because the cost of living is lower in South Africa than in Europe, property prices are lower, standards of living are high and the country has something to offer everyone.
From a real estate investor’s point of view the timeless attraction of the country for so many people on so many levels means that there will always be demand for rental or resale property. Over the much longer term for those who like to speculate, South Africa is trying to shore up its economy, tackle unemployment and poverty and generate intrinsic wealth for its citizens. This will gradually lead to an increase in purchasing power for the majority which in time will create more domestic demand countrywide for property to rent and buy and broaden the market that an investor can target making South Africa a great bet for property investment on so many fundamental levels.
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