Foreign interest in SA property remains strong

BUSINESS in Gauteng and leisure in the Western Cape are driving the majority of purchases of South African property by foreigners.

According to property analytics company Lightstone, foreign confidence in the local property market is holding firm, although sales by foreigners outnumbered purchases in the last year. Transaction data collected by Lightstone shows that in the past 12 months 8530 of the 280395 properties sold in South Africa were bought by foreigners.

Gauteng attracted the most foreign buyers, with more than 4000 transactions, followed by the Western Cape with just over half that number. KwaZulu-Natal saw more than 1000 foreign buyers in the period, followed by the Eastern Cape (376) and Mpumalanga (185).

Gauteng's attraction seems to be access to business in the rest of Africa, and the Western Cape's strong point is the lifestyle it offers.

With the rand having depreciated by about 33% over the past three years, property prices in South Africa are tempting for investors holding dollars, euros or pounds.

The total value of foreign purchases over the past 12 months was R9.68-billion at an average price of R1.2-million, while foreign sellers of South African property raked in a collective R11.28-billion.

During the past year more foreigners sold South African property on a net basis, which Lightstone attributed to the state of the world economy and the local political landscape - including the government review of land policies, which could soon make it more difficult for foreigners to own South African property.

According to the data, 53% of foreign buyers bought for cash, with the rest bonded, although requirements by local banks make the process of applying for a bond much more difficult for foreign buyers.