Foreign buyers keen on SA properties again, with price tags of up to R41m | Fin24

Foreign buyers can live a far cheaper lifestyle in SA.

Foreign investment in SA’s property market was hit by the Covid-19 pandemic – by both the economic impact and by international travel restrictions. But interest is starting to pick up again, say experts.

Susan Watts of RE/MAX Living told Fin24 there has been an uptick in sales to foreigners compared to last year. She attributes this the exchange rate, a drop in prices and an increase in the cost of living internationally, which means some foreign buyers can live a cheaper lifestyle in SA.

This was echoed by Rory O’Hagan, head of the Luxury Portfolio division at Chas Everitt International, who has also seen an increase among prospective buyers from elsewhere in Africa as well as India, China, Europe, the UK and the US.

But industry members say it’s premature to worry that an increase in foreign property purchases will impact prices. “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,” says Andrew Golding, chief executive of the Pam Golding Property group.

Hey, big spender

About 5% to 10% of enquiries are currently from foreign buyers, says David Burger of Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs. At the opposite end of the spectrum, Seeff’s Ross Levin estimates that about 33% of its luxury sales are to foreign buyers, predominantly from Germany and Europe.

But anecdotally, the number of big spenders is smaller. Golding estimates that nationally, foreign buyers comprise only around 1% of total luxury sales to foreign buyers at any given time period.

Some of the most notable big-ticket recent purchases include a sale by Pam Golding Properties, which sold a home in Clifton on Cape Town’s Atlantic Seaboard purchased “sight unseen” by an American for R30 million, and a penthouse in the V&A Marina which fetched R41 million, also acquired by a US buyer.

Pam Golding Property group also says it recently sold several homes in the R20 million to R30 million price band in one month alone in Sandhurst and Hyde Park, Johannesburg. But half of these recent acquisitions were by locals, with the balance to foreign buyers – predominantly from the rest of the African continent.

In December 2020 a Clifton beach bungalow was sold for R37 million to an Emirati buyer from Dubai.

Golding says foreigners do buy across all price sectors, and do so for a variety of reasons, ranging from leisure use to occasional use for business purposes. There are also returning expats, retirees, and investors.