Real Estate Investor Magazine South Africa June 2016 | Page 63

countries in which these cities are located all struggle
with various economic and political difficulties, their
metropolitan property markets have remained strong.
In South Africa, Cape Town and Johannesburg
have both enjoyed years of decent growth after the
real estate boom died down in the late 2000s. It’s
simply a case of supply and demand. There is a huge
demand in both cities for real estate, as more and more
people from around the country migrate, looking to
live in the nation’s financial hubs. Thus, despite all the
economic turmoil in the country, these two markets
should remain resilient in the medium- and long-term.
Local property may just prove to be a better
investment than sending your money offshore at great
cost and risk.

devalue, slowly but surely, you’ll find it easier to service
your Rand debt using your foreign assets.

Final thoughts

The allure of holding non-Rand denominated assets
offshore needs to be carefully weighed against the
costs of doing so. You must also factor the current
turbulence of global markets into this. If you don’t
have a lot of capital, you could quite easily find yourself
in a sticky situation should your offshore portfolio
underperform.
The situation here in South Africa is not ideal,
but with some creative thinking and bold decisions,
it is possible to extract value from local investment
opportunities.

A less than ordinary plan

If you have some extra liquidity but not enough to
safely invest into a large offshore portfolio, you may
want to look at putting a large deposit down on a local
property. You can then convert the remainder of your
funds into foreign currency and send them overseas.
Once you have this money overseas, you may find it
a lot easier to start servicing your Rand denominated
mortgage. This could turn headwinds like a falling
Rand and strengthening Euro/USD/AUD into good
things for your investment. As the Rand continues to
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Disclaimer: The information in this article is intended as a
guide only. It is neither to be construed as financial advice nor to
be regarded as a definitive analysis of any financial, legal or other
issue. Individuals must not rely on this information to make a
financial or investment decision. Before making any decision,
we recommend you consult a financial planner/adviser to take
into account your particular investment objectives, financial
situation and individual needs.

RESOURCES
Sable Forex
JUNE 2016 SA Real Estate Investor

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