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South Africa: South Africa’s Rebirth - Camilla Mabbott, Aylesford International

South Africa's Rebirth

Going on holiday to a destination is one thing, but what makes you want to buy there? What might put you off are things like a brutal time difference, exhausting journey, penal currency exchange and turbulent seasons which may mean your holiday home gets swept away while you’re having dinner at Nobu.

Co-incidentally on the same subject, I recently spoke to a representative from Deloittes who was conducting a survey on real estate investment in the South African Development Community (which ranges from The Congo to Mauritius). They are trying to understand what will encourage investment in property within the various regions rather than just encouraging short-term tourists. This indicates a pro-active strike to create a new market – perhaps these unlikely countries to buy might be the answer we are all looking for?

South Africa itself certainly is an interesting entity. The recent history of the South African rand means that not only will TV producers continue to make commercials there because it costs half the price (and they won’t have to call in weather insurance), but tourism is on the increase particularly in the run up to the World Cup. The natural habitat and sheer open spaces are as much an attraction as the local wine. The weather is at its best when it’s at its worst in England and the time difference is only one hour ahead of GMT for half of the year.

Property would have cost you 15% less last year and 25% less two years ago according to local real estate agents. With the advantages brought by the 2010 World Cup and associated spending by the government on infrastructure, more wealth will be generated and much of that will go into property. The outlook also suggests good growth and stable inflation and interest rates. The disadvantage of course is that there are certain areas of caution and securitised living is paramount.

Looking at who is buying in South Africa, 98% are locals which means there is a robust resale market. 65% of the minimal overseas buyers are from the UK, but foreign interest is yet to have a significant influence on the market place. Coastal regions and golf developments are the most popular places to buy and it is here that demand outstrips supply and the prices are pushed up. That said, there are very few cases of crazy prices as value for money is still realistic.

Security is always a concern and sadly it has become a way of life for people and they don’t think twice about the sort of measures we might find alarming. Ex-pats and locals all maintain that the press create more fear than there is on the streets, particularly in Cape Town and the surrounding regions. Developments are also an excellent way to avoid any sort of security issues as they are protected and located in regions that don’t attract the inner-city crime. Dreadful things happen all over the world, but the mud seems to stick with South Africa as it’s a good story for the media to tell.

Personally, I see it as a tremendous advantage that South Africa is still a pure paradise and largely un-invaded by foreign residents. It is an adventure to live there and you’d be a pioneer to buy there. Apart from the potential, and likely, increase in property prices as the market becomes more established, the sheer joy of being immersed in a wonderful country without a chance of bumping into someone you know is a rare delight. Your neighbours really are Out of Africa.

Camilla Mabbott

Camilla Mabbott is a Director at property consultants Aylesford International. www.aylesford.com

Aylesford International now have offices in Cape Town and Johannesburg.

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