Many factors make South Africa a good property investment arena. Here you can read about what keeps investors excited by South African property.
A growing middle class and the 2010 World Cup have helped bring about a new demand for property in South Africa, especially within the rental market. Admittedly 2007, with the introduction of higher interest rates has seen a slowdown in property prices, but this is considered to be an advantage by many investors as they now have the opportunity to buy into a slower market. In addition, the recent increase in interest rates (2007) is driving the rental market upwards creating strength in the buy-to-let market. While growth has slowed to 8-9%, it hasn't stopped and it is predicted to recover to double digitsagain in 2008, in line with the imminent drop in interest rates.
President Thabo Mbeki actively welcomesd foreign investment and developers of new residential and commercial properties, and those undertaking renovation projects in the major cities now receive tax breaks of up to 20% for five years. Investors on a smaller scale who are looking at buying one or two units are also in line to benefit from the increasing demand for rental properties in the internal and external tourism sectors.
The shortage of housing and slow building rates keeps the property market buoyant and off-plan purchases continue to give investors very good returns of around 20 to 50% per annum, especially in areas of the Eastern Cape on the Garden Route and West Coast developments. Cape Town and the surrounding suburbs as far as the redeveloped Muizenberg are crying out for homes as the middle-class in this region grows at unprecedented levels. Less developed, future hotspots are predicted to be located at Kwa-Zulu Natal in the areas around Umhlanga and Ballito.
Capital is unlikely to maintain the very high growth rates achieved during the 2004/5 periods, but, according to the ABSA (one of the largest mortgage lending banks in South Africa), growth is predicted to maintain a steady rate of 12 to 13% per annum. The levelling out of property prices has led to an increase in interest from international property buyers, which in itself maintains a steady growth rate.
The recent increase in interest rates, which is responsible for the slowing of the property market, is predicted to be responsible for a rise in rental demand and a consequential hike in rental rates. Rental rates in 2007 are predicted to rise by 12 to 15% according to the South African property pundits.
The predictions for the South African economy are for steady growth over the next ten years. Tourist numbers are on the increase and 2006 saw a growth of over 16% in this sector, with visitors from the UK and the rest of Europe as major contributors. .
Get the latest property and investment opportunities direct to your inbox for FREE (you can unsubscribe anytime)
South African Listed Real Estate Outclasses Equities in 2015
Five African Property Markets in Top 10 Emerging Economies
More South African Buyers Expected in UK Property Market
South Africa: Rand Investors' Misfortune is Foreign Investors' Gain
The Rise of the First Time Buyer in South Africa
Key Real Estate Investment Opportunities in Africa
All property news from South Africa
Subscribe to our RSS Feed
Subscribe to our newsletter and keep up to date with the latest and best investment opportunities around the world!