South Africa

News24.com | Foreign buyers still picking up SA property bargains - see who is buying and where

For international buyers, competitive pricing due to current exchange rates has made property acquisitions in South Africa very appealing, says Dr Andrew Golding, chief executive of the Pam Golding Property group.

Yet, he says, despite the occasional prominence of certain noteworthy sales to foreign buyers, it's also true that relative to the total sales in the country in any given period, the level of foreign buyers of residential property in South Africa remains insignificant at well below 1% of the total number of sales annually.

In respect of Pam Golding Properties, sales of residential property in South Africa to foreign buyers also remain fairly low, representing 5% of the group's total sales over the past 12 months.

Foreign buyers range from professionals and business people to families and retirees.

Most foreign buyers of residential property in SA come from Zimbabwe, Botswana, Germany, the UK, the USA, France, Nigeria, Switzerland, the Netherlands, China, Sweden, Belgium, Zambia, Namibia, Mozambique, Kenya, Australia, the UAE, Denmark and Austria. 

However, foreign buyers are even from as far afield as Russia, Pakistan, New Zealand, India, Spain, Saudi Arabia, Luxembourg, Portugal, and South Korea.

Golding says one trend is that, increasingly, foreign buyers are from other African countries. Buyers from the rest of Africa continue to show an appetite for residential property in South Africa and comprise an increasing proportion of the country's foreign buyers.

Misconceptions

"Contrary to some misconceptions in the marketplace, international buyers tend to purchase property across all price sectors, consisting of different types of property in regions and locations around the country. These range from houses and convenient, lock-up-and-go homes such as apartments in secure complexes – including convenient central city apartments and frontline beachfront units, to homes within secure estates, game farms and game lodges," says Golding.

Furthermore, he says it is also a misconception that international buyers have an impact on sales prices. International buyers are savvy and research the market thoroughly and will only pay market-related prices.

Due to current exchange rates, a R5 million house in South Africa would, for example, now be cheaper for a buyer from Europe (-16.8%), America (-15.7%) and Britain (11.9%) as a result of rand weakness during the first half of 2020.

"On the Cape's Atlantic Seaboard, we are seeing optimism from value-driven buyers who have now concluded transactions for properties viewed in January prior to returning abroad, acquired as a result of the competitive pricing due to the favourable exchange rate," says Golding.

"International buyers account for a relatively small percentage of demand in the Cape Town market overall – but are a more important source of demand in specific areas such as the Atlantic Seaboard."

Pam Golding Properties has seen a good run in Somerset West in the Boland region of the Western Cape, with several sales concluded for overseas buyers in Switzerland, the UK and Netherlands. On the Garden Route, its George office – which incorporates sales in the gold estate Fancourt and the Wilderness area, is currently seeing increased interest from foreign buyers.

The Pam Golding St Francis Bay office reports a couple of residential properties purchased "sight unseen" during the lockdown, by buyers in Holland and the US, while in Oudtshoorn a property was sold to a buyer from Dubai.

Other areas where Pam Golding Properties has sold property to foreign buyers include Franschhoek, Cape Town's Northern Suburbs and Southern Suburbs such as Constantia, other Boland areas such as Paarl and Stellenbosch, as well as Grahamstown, Hoedspruit, the Karoo (Colesberg), Midrand and Johannesburg's Northern Suburbs such as Westcliff and Sandton.

Atlantic Seaboard

Ross Levin, managing director for Seeff Atlantic Seaboard and City Bowl, says the area has always been a sound investment, attracting interest from across SA, as well as from expats and foreign buyers.

"We are delighted to see that buyers still consider this area to be hot property. Many foreign buyers invest in guest houses, Airbnb properties or holiday and retirement houses and many spend long periods in the country during the tourist seasons," says Levin.

"While the upper end of the market - properties above R18 million - remains challenging as wealthy buyers (who do not need to buy right now) continue to wait out the current economic instability, the mid-market sector is very active."

He says May and June have seen good activity with June on par with February - which is traditionally a high-value month for sales to foreign buyers.

June sales across the Cape Peninsula amounted to over 22 units sold at a total of about R175 million across areas such as the Atlantic Seaboard, Constantia, False Bay and Hout Bay.

"Encouragingly, over R100 million of this was on the Atlantic Seaboard, predominantly in Camps Bay and Sea Point. Buyers are predominantly from the UK, Germany, the Netherlands, and other Northern-European countries such as France and Belgium, but also from Russia (an R18 million sale in Camps Bay). There have also been quite a few Zimbabwean buyers this year," says Levin.

Out of the total of about R170 million in sales to foreign buyers across Cape Town in May, about R70 million took place in the Atlantic Seaboard and City Bowl areas, mostly sectional title property and in particular in the suburbs of Camps Bay, Sea Point, Mouille Point, Green Point and at the Waterfront to buyers which includes Germany, Ireland and Switzerland.

March and April sales to foreign buyers were well below average at a total of just R60 million and R40 million respectively for the Cape metro. February - traditionally good month - was at around R170 million with strong interest from UK and German buyers, but also other Northern European countries and the USA. There were also some Chinese and Zimbabwean buyers.

Adrian Mauerberger and Bryan Ginsburg, Seeff's luxury sectional title agents for the Atlantic Seaboard, report that they are seeing a definite uptick, mainly in trendy areas such as Green Point and along the Sea Point beachfront area.

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