SA expats are hot property

Private Property South Africa
Private Property Reporter

Though the outcome of the 2009 general election was no surprise, the fact that it was free and fair came as a pleasant surprise to many – particularly South Africans abroad, who are fed a staple diet of bad news about life back home.

But in the months leading up to the election, South African expats have been hankering for home like never before. And rumour has it that they’re coming back in droves. This is good news all round, especially for the property market.

Martine Schaffer is the managing director of Homecoming Revolution, a non-profit organisation that encourages and helps South Africans return home.

Schaffer says that March was the busiest month ever for the organisation’s website (www.homecomingrevolution.co.za) which is its primary marketing tool. “We’ve seen a 35% increase in the number of enquiries from South Africans abroad compared to this time last year. And we’ve seen a shift from loose enquiries to more specific ones.” Though the folks at Homecoming Revolution don’t probe why people are seeking to come home, Schaffer says she’s sure that global circumstances have a lot to do with it.

Alana Bailey agrees. She heads up the Come Home Campaign (www.comehome.co.za) which was birthed by AfriForum, an initiative of Solidarity trade union. “The number of people making enquires has doubled over the past three months. Since February we’ve seen a huge increase in the number of people returning – mostly due to retrenchments, termination of contracts and the economic climate in general.”

Bailey tells of a woman who has been living in the US since 1985 and now wants to come home. “Her feeling is that wherever you are, you’re going to be affected by the economic meltdown – so rather be here at home.”

Neither Homecoming Revolution nor Come Home Campaign can provide figures for the number of people returning, but they are certain that it’s happening.

“Enquiries about property and removal services are good indicators. And property people are saying their markets are being helped by the numbers of people coming back,” says Schaffer.

As a means of engaging with South African expats, Homecoming Revolution hosts events overseas. Schaffer says that to date, the organisation has put on 20 events in Dubai, Canada, the US and the UK. “Our largest annual event is an expo in the UK. We invite companies to come along with us to showcase South Africa and to provide information about everything from job opportunities to immigration advice.”

One company that is a regular partner at this event is Seeff. General Manager Emarie Campbell is a huge fan of the expo, not only because of the business it generates for Seeff but because of the positive ethos it promotes. “Being a part of it is great. We leave with a suitcase full of leads and a fresh perspective on our country.”

She says that what she also loves about the expo is that it attracts people who are serious about returning. “Within about 6-12 months, most of the expats that we chatted to are making the move back home.”

Homecoming Revolution concentrates on transient markets, like London. “This is where you find people who went on a two-year working holiday visa and stayed. They may have applied for an ancestral visa or a highly skilled visa. We believe that it’s important to showcase South Africa to those people. Those are the people we want to attract; people in the healthcare, finance, IT and engineering sectors.”

According to recent research by Homecoming Revolution, 78% of South African expats want to come home. Schaffer says that this is consistent every time they do research.

So what’s keeping them away? Bailey and Schaffer agree that crime and the fear of not finding work are the biggest culprits.

“Coming home is much easier for those who didn’t sell their properties,” says Bailey. “And expats who have been retrenched are very hesitant to buy property unless they have a firm offer of employment. Even if they have a nest egg to invest, they’ll start by renting, all the while keeping their eyes open for a bargain.”

Increasingly, expats are investing in property now for when they return, even if they aren’t sure when that will be. “They contact us with questions about transferring money in the most beneficial way. They realise that now is a good time to invest in the property market rather than in the share market.”

Campbell concurs. “There are some incredible deals to be had. This is truly a buyer’s market and expats looking for property in South Africa at the moment are spoilt for choice. They’re also able to put down the 20-30% deposit that our banks are after and this makes the whole process pretty painless.”

Donovan Schreuder, an expat living in Dubai, knows this only too well. He’s been using his hard-earned durhams to buy property back home. Schreuder, who left South Africa five years ago, says that after investigating the property markets in the UK, Europe, the Middle East, the Americas and South Africa, he found that his home country offered the best value.

“The SA market is shaping well at the moment. In London and Dubai the levels of negative equity are horrific. There is still growth potential in SA. I did my research and found that there were good opportunities for investment in the low- to middle-income housing market, as well as commercial property market. Longer term, it’s always difficult to predict, but if things stay stable politically and the country has a successful showing in 2010 then the outlook will be extremely positive for the next 10 years.”

Schreuder studied at Rhodes in Grahamstown and has since bought property in his old stomping ground and outside Port Elizabeth. “These are very different types of investments. Grahamstown is a university town and so my properties there are rented by students. These were inexpensive purchases considering the rentals I’ve secured and can maintain. The Port Elizabeth properties, on the other hand, are providing significant capital growth and are in an area that is developing well and will do so in years to come.”

He says that the return on investment in both areas has been solid. “I’ve seen good capital growth in both regions and have a positive cash flow overall.”

Schreuder says that he never intended to come home “because of violent crime”. But lately he has found himself considering coming home.

Stories such as Schreuder’s aren’t all that rare. Home is, after all, where the heart is.

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