Foreigners not 'flooding in' to buy SA property
Apart from isolated cases where foreign buyers purchase local residential property they perceive as bargains, South Africa is not seeing a flood of foreign buyers despite the weak rand.
This is according to FNB Private Bank Lending, a unit that provides structured and complex residential property finance. Praven Subbramoney, CEO of FNB Private Bank Lending, says the bank’s Estate Agent Survey points to a slight decrease in foreign buying. He says their statistics show that foreign home buyers, as a percentage of total buyers, is currently at 5%, down from 5.5% at the beginning of 2015.
He says the trend can be attributed to a number of factors, such as the level of uncertainty in the global economy. “We also have to consider the potential impact of local fundamentals such as the general state of our economy, limits on foreign buying and the weak rand. The weak currency is viewed as a sentiment dampener, and both local and foreign investors are cautious when dealing in rand-based assets.”
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Gauteng property buying trends revealed
What's driving home sales patterns in Gauteng?
There are, of course, all sorts of external variables - like interest rates, work circumstances or family changes - that can influence consumers to buy a new home or not.
However, Bill Rawson, Chairman of the Rawson Property Group, says once potential buyers have decided to buy, their choice of home and location will generally depend only on affordability, security and convenience, and the varying combinations of these three factors are what actually give shape and form to most real estate markets.
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Five tips for buying the best property you can afford
While all property purchases have their merits, they are not all equal. In order for a buyer to get the most out of their property purchase, they need to make the right buying decisions from the start to ensure they give themselves the best possible opportunity at a good return on their investment.
This is according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who says although recognising and buying a home at a fair market value is a good start, it is not the only thing that will guarantee long-term appreciation on the buyer’s investment. Buyers will need to apply certain principles and guidelines for property acquisition that would improve their potential for investment growth in the future.
He says sound property buying fundamentals never go out of fashion. These include key aspects such as the property’s location, the value per square metre and the potential rental yield - these will always be the key criteria on which a savvy investor makes a decision.
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Short-term rentals often 'bad news' in complexes
In the current tough economic climate, many South Africans are looking for ways to supplement their income, and opportunities offered by global accommodation rentals website Airbnb are being seized by homeowners around the country.
Specialist sectional title attorney Marina Constas says, however, that the Airbnb trend and short-term holiday rentals in residential complexes are bad news for sectional title homeowners - and for sectional title complexes.
Constas says investors who buy properties in residential blocks, and then rent these out on a short-term basis - whether through Airbnb or other channels - are jeopardising the reputations, property values and security in sectional title developments, including premier residential complexes in coastal towns and cities, where there is a burgeoning demand for secure, affordable, self-catering holiday accommodation.
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Buying property: Zoning questions you must ask
The zoning rules that came into effect in 2015 in Cape Town encourage densification where possible, and have largely benefited many who decided to subdivide their properties or have redeveloped their land - but buyers should be aware of what might happen to buildings around them before they sign an offer to purchase.
This is according Shan Hulbert, sales manager at Knight Frank Residential SA, who says this is particularly important if they are buying a property because of its views or lack of higher storey buildings surrounding it.
The latest zoning and development rules have streamlined the standardisation of types of development and plots, and certain areas will have more plots with rights to subdivide or develop upwards whereas in the past it would have been more restrictive.
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IEASA Western Cape to host business broker course
For the first time, IEASA - Western Cape will be offering a complete A-to-Z course in becoming a successful business broker. This is an intensive two-day seminar that will provide the knowledge and confidence to compete in this tough but rewarding industry, says Annette Evans, general manager of Institute’s Western Cape branch.
“The course will be presented by Mike Hindle, a business broker himself with 35 years’ experience covering hundreds of business transactions,” says Evans.
“It is expected that everyone attending this course will come away armed with a huge amount of knowledge, should they either want to start or develop within business broking.”
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Pros and cons of buying a tenanted property
Buying an investment property with a tenant already in place can be a very attractive option - who wouldn’t want to avoid the admin of finding, vetting and contracting a new tenant - and earn income from their investment from day one?
However, according to Jacqui Savage, National Rentals Business Development Manager at the Rawson Property Group, tenanted properties aren’t always a guaranteed win for purchasers.
“There is no hard-and-fast rule about whether a tenanted property is a good investment or not,” says Savage.
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