Foreigners still drawn to our affordable top-end market

AGENTS have noted there is still significant interest in certain areas of South African property from international buyers who they believe they get more bang for their buck than in comparable areas abroad.

Recent research by Deutsche Bank shows the average salary in San Francisco in the US is more than five times the average salary in Cape Town, and in Zurich it is more than four times the Cape Town or Joburg average, says Rory O’Hagan, head of Chas Everitt International property group’s luxury portfolio division,.

“This indicates luxury property in South Africa is affordable even to the average earner in many parts of the US and Europe.”

However, sales to ex-pats have been diminishing “because of the political climate and there has been a notable decline in this buy-to-let sector.

“South Africa has much to offer international investors and expats, including excellent value against major currencies. The only thing lacking is economic and political stability to foster investor confidence and assuage the current cautious sentiment.”

Richard Hardie, chief executive Knight Frank SA, says there is still considerable foreign interest in highworth South African property.

“We’re definitely seeing this compared with last year. A property we had on the market in Bakoven for R32 million literally saw the United Nations view it over 10 days. It eventually went for R25m to a foreign buyer.”

Hardie says foreign buyers are taking advantage of fluctuating currency exchange.

“The most recent sale of land in Camps Bay was again an international buyer.”

Chris Cilliers, chief executive and principal for Lew Geffen Sotheby’s International Realty in the Winelands, says they are still seeing considerable interest, especially from European buyers.

Currently concluding a R19m sale with German investors with another for more than R50m pending, Cilliers says most inquiries come from German and Swiss buyers.

The company was impressed by the interest shown at the Hafengeburtstag Hamburg last year.

“We showcased Val de Vie Evergreen retirement village. Most attendees who expressed interest were undeterred by the water situation or land expropriation issue.”

Constantia is an area where foreign and expat investment have remained relatively consistent, says Joanna Thomas, area specialist for Lew Geffen.

Adrian Goslett, regional director and chief exec of Re/Max of Southern Africa, says sellers in the luxury market should expand marketing efforts to reach international audiences. –

OPENING NEW DOORS With average salaries in Europe and the US higher than those in South Africa, luxury property here is affordable for many foreign buyers.