South Africa posts good investment returns

Individuals with a property interest in the South African market will be pleased by news that despite the economic crisis real estate in the country offered greater returns than in the US or UK last year.

The most recent real estate performance index by IPD/Sapoa demonstrated that potential investors were able to benefit from an average total return of 8.7 per cent from South African property.

This can be compared to 3.5 per cent from the UK and a loss of 17.5 per cent in the US.

According to Mohamed Kalla, a property analyst at Barnard Jacobs Mellet, the resilience of the country's property market can be put down to the strength of its banks.

"South Africa's credit markets were more sheltered by the global banking crisis when compared with other countries," he told Property Abroad.

"This, coupled with more prudent gearing levels, meant that property funds were not forced to sell assets at rock-bottom prices to avoid loan-to-value breaches."

Investors looking to rent out property in the country could benefit from the forthcoming football World Cup, which is being held there from June 11th until July 11th.

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