Buoyed by positive sentiment in the country since the start of the year, foreign buyers are snapping up South African property again.
Although some observers had predicted that foreign interest in South African property would decrease, this has not been the case, according to a report from Lightstone Property.
Their data shows that Gauteng and the Western Cape are the most popular provinces amongst foreign buyers, while the Eastern Cape is growing in popularity. “Gauteng and Cape Town are evidently at the top of the purchasing pile; Cape Town due to its cosmopolitan ambiance and multi-cultural inclusiveness, and Gauteng because of the thriving industrial and business hubs which offer many employment opportunities,” explains Hayley Ivins-Downs Head of Property at Lightstone.
What foreign buyers are spending on property
Properties in the R2m to R3m price band remain popular in both Gauteng and the Western Cape, with growth of 21% and 27% respectively. In the higher value bands the Western Cape is the top performer in the country, followed by Gauteng. The R3 million to R4 million property value band in Gauteng has experienced a growth of 39% but a significant decrease in the above R4 million value band. The Western Cape in comparison has enjoyed the most growth in the R4 million value band and a negative growth in the R3 million to R4 million band. According to Ivins-Downs the upper value band in the Western Cape will continue to grow in popularity.
The suburbs that are popular with foreign buyers
Taking a closer look at transactional data within the provinces, Cape Town and Milnerton in the Western Cape; and Sandton and Johannesburg in Gauteng are the highest growth areas*.
Foreign buying in Gauteng
Historically, Lonehill, Sandton which used to be a very popular choice amongst foreign investors has declined somewhat. Parkmore has now become very popular and surprisingly Douglasdale has also shown an increase since 2016. Looking at Greater Johannesburg, Gauteng the foreign transaction growth in Parkhurst weakened, while Northcliff has become a very popular choice. Glenvista is shown to have increased in interest since 2015.
Foreign buying in the Western Cape
In the Western Cape, Cape Town foreign interest is far wider spread geographically. The growth in Sea Point which has been very popular over the last five years has declined, while Rondebosch has doubled in volume and Observatory, where new developments has tripled has become very popular. Kenilworth has also shown an increase in foreign investments since 2016. In Milnerton in the Western Cape, foreign transactions have grown in Century City. Table View continues to be a popular choice as it has in previous years.
“Earlier this year, Lightstone reported on the Western Cape Drought and how it did not deter foreign investors to look to the province for purchasing opportunities.” The current view of the percentage of property transfers by province and purchase year is evident of this statement where the Western Cape is the top performer in the country. The province has shown a steady increase of foreign sales over the last five years which is currently sitting at just over 7% of total sales to foreign buyers.
Ivins-Downs concludes that with our president’s focus to increase investments from abroad and his talent for negotiations, more and more foreigners will look for purchasing opportunities in the coming months and years.