Foreign Property Investment
2014/09/18

"What is driving increased foreign buyer activity? "

Foreign buyers are attracted to the South African property market for a number of reasons. The first is the substantial depreciation of the Rand, which continues to make South African property an even more attractive international investment prospect. If you're buying in Euros, Dollars or Pounds, you'll get far more for your money in South Africa than you would in most sunny places in Europe.

Secondly, South Africa is a stable country that offers first-world infrastructure and amenities, coupled with breath-taking scenery and beautiful properties, offering foreign buyers exceptional value.

It must also be said that these foreign buyers are astute investors with a keen eye for a good deal, and when surveying real estate opportunities globally, an investment in South Africa's most prestigious property locations present a solid investment choice. For example, in Avenue Des Huguenots in Fresnaye, a property was bought for R224,717 during 2005 and sold during 2013 for R1.43m, showing a nominal return on investment of 26% per annum over 8 years.

Another property in Head Road was bought during 2003 for R3.2m and also sold last year for R26m, showing a nominal return on investment of 22% per annum over approximately 10 years. These two properties were renovated by the owners before they were resold.

While the days of 'flipping' properties at huge profits are mostly over for now, investors are happy to buy the best land, renovate and then live in there for a few years while their investment grows.

Foreign Property Investment is set to continue growing exponentially in South Africa.

SA Property Investor