Tag Archive for: Buying a House in South Africa

There’s a lot of talk about future cities, many of them being the sprawling metropolises of the world. The new world order for professionals, executives, and indeed millennial behaviour is to catch a taxi to work if needed, then to walk from work to gym, move on to coffee with friends – and cycle, walk or take a quick Uber home.

South Africa’s evolving modern urban living landscapes are right on par with global trends in areas such as Johannesburg’s Rosebank zone and the V&A Waterfront in Cape Town, where people are looking for smart alternatives to untenable traffic congestion, hair-raising commutes and the need for time efficiency.

Locally, urbanisation is rapid when you look at the growth: 34.2 million people lived in urban areas in 2014, a figure that will jump to 49.1 million by 2050 according to the SA Council of Shopping Centres. As the commercial property market in Rosebank explodes, Jonathan Kohler, CEO of Lansdowne Property Group says the global trend towards an integrated living and working environment has far-reaching consequences including cost-saving and security. The private property market is playing catch-up with 16 new developments currently underway in Rosebank.

Rosebank has become a favoured destination for investors because of its vibrant mixed use of commercial, retail, entertainment and residential attractions. It is undoubtedly one of Joburg’s fastest growing and fashionable places to be and is linked to the Gautrain. In terms of affordability, Kohler explains the reasons why upmarket apartments are a compelling buy in the current market below.

#1: Urban living on the rise

People are wanting to live, work and relax in one space to create a balance – it’s a very workable solution for the many international and domestic inbound travelling executives who need to settle for 3 – 6 month contracts close to work. “The lock-up-and-go appeal of investing in an apartment accommodates this lifestyle with lucrative rental opportunities,” says Kohler.

#2: Rocking the rentals

The average rental price for an unfurnished 1-bedroomed apartment in Rosebank is about R13,000 a month and R24,000 for a 3-bedroomed place. “Furnished apartments give an even higher yield, but are harder to rent out,” says Kohler. There is an increase in Joburg execs relocating their families to Cape Town and choosing to fly in weekly to work in Sandton and Rosebank. Whether private investors buy apartments like these to rent, or corporates buy into an apartment to house their international contract execs, there is no doubt that Rosebank property will appreciate substantially in the coming
5 – 10 years.

#3: Winds of change

There’s talk of the property market finally starting to bottom out, but even if this is the start of an uptick or not, the interest rates are as low as they are going to go, and building costs are not going to get any cheaper – in fact they’ll go up despite what the market is doing. “The point is, the business district is central to the Rosebank and Sandton zones – this is not going to change, it’s a landmark area,” says Kohler. “As the economy strengthens, the prices of urban city properties are going to shoot up.” There is certainly investment opportunity in a zone like Rosebank which has had the best capital appreciation in Joburg over a 10-year period.

#4: Mobility without the drive

The global trend is for new sustainable precincts to lean towards a pedestrian-focused movement, not a vehicular one. “While there will always be room for cars in the smart cities of the world, the appeal of greener, less congested cityscapes holds huge appeal, where young professionals and visiting execs don’t have to use a car to get around,” says Kohler.

There is no doubt that smart cities, are changing the way we live and work. “With more people working on the move, at home, and in shared offices spaces; urban apartments are designed to embrace new urban living trends,” concludes Kohler.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Due to improved sentiment about South Africa, it would not be surprising to see an increasing demand for SA residential property among foreigners and SA expats, according to John Loos, household and property sector strategist at First National Bank.

This is despite demand levels for SA domestic property from foreigners and SA expats being down significantly compared to 2015 and 2016, according to the FNB Estate Agent Survey for the first quarter of this year.

Estate agents surveyed estimated that 4.3% of total home buying for the two quarters up to and including the first quarter of 2018 was by foreigners.

The survey estimated that the percentage of SA homes being bought by SA expats was 1.51% of homes in the first quarter of 2018, after declining since 2015.

The survey also indicated that the number of buyers from other parts of Africa purchasing residential property in SA has slowed faster than overall foreigner home buying here in recent years. For Loos this could arguably reflect tougher African economic conditions compared to those in more developed countries in recent years.

The estate agents’ estimates about a weakening demand among foreigners and SA expats throughout 2017 reflected “dampened investor sentiment” towards SA in general, according to Loos.

In his view, this was likely caused by the stagnation of SA’s economy over a number of years, uncertainty about the SA government’s future economic policy, and “negative news” about the country such as sovereign rating downgrades to “junk status”.

“However, we have started 2018 with a noticeably more positive mood in South Africa, partly due to the political leadership change in the country following the ruling party’s elective conference in December 2017,” said Loos.

Positivity has also been reflected in a stronger rand and a rise in the RMB-BER Business Confidence Index in the first quarter of 2018.

“We will wait for further quarterly surveys before concluding that foreigner and expat buying levels are picking up meaningfully or not,” said Loos.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, and Remuneration needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: Fin24 [1]. Image sources: [1].