Moody’s announced in its credit opinion report on Tuesday, 4 April, that South Africa’s credit rating would remain stable. This decision is an incredibly positive one that ought to stimulate foreign investment within the country.
“The housing market has had several wins over the last few weeks – the first of which being the MPC’s announcement to keep interest rates unchanged, and the second of which being Moody’s decision not to downgrade our credit rating. Both imply faith in a stable outlook for our economic future, which is a victory for all South Africans,” says Regional Director and CEO, Adrian Goslett.
Beyond having a beneficial effect on locals, Goslett predicts that these decisions will also have a positive impact on the state of the South African housing market in general. “We remain hopeful that these announcements will renew activity within the housing market, but only anticipate a real turnaround post election when more political and economic certainty can be realised,” Goslett predicts.
That being said, certain nodes have already begun to reflect growth, particularly in the foreign buyer’s market. According to the RE/MAX Living office, which operates in the Cape, Cape Town remains an attractive option for foreign buyers. Over the last year (January 2018 – January 2019), 12.5% of the office’s mandates were sold to foreign buyers, which is an increase on the previous year’s 10%. 26% of these sales were over R10 million, with 8% being over R20 million. The highest priced property sold during 2018 by a RE/MAX Living agent to a foreign buyer was priced at R32 million.
“Our figures indicate that Cape Town (including City Bowl, Atlantic Seaboard and Western Seaboard specifically), is still viewed as an attractive investment for foreign buyers. At RE/MAX Living, we have experienced an increase in the number of foreign buyers (the majority being from Europe) buying property here compared to previous years. We have a substantial American and German client base and, with a large number of our agents speaking foreign languages, we are perfectly equipped to assist international buyers,” explains Susan Watts, Broker/Owner of RE/MAX Living.
Following the positive outcomes we have experienced thus far, Goslett therefore predicts that, provided our outlook remains positive, foreign buyers will continue to be attracted to markets such as RE/MAX Living’s in the year ahead.