Real Estate Investor Magazine South Africa March/April 2020 | Page 59
A
ccording to entrepreneur and property investor,
Grant Smee, recent indications as per media reports
show that South Africans (in particular) are cautious
to invest due to the lack of necessary infrastructure for their
investment/s to thrive.
Grant believes that it’s not all bad news and says that
2020 is the ideal year for investment in the property sector;
“President Ramaphosa places great emphasis on the country’s
infrastructure which is set to begin its slow journey to
improvement this year. Based on this, we will see improved
stability in both the commercial and residential property
sectors”.
Grant outlines the top seven
reasons to invest in the South
African property market in 2020:
1
The property market is one of the most stable
areas of investment in South Africa:
While some investors may choose to play the stock
market rather than invest in property, the latter
option is far more attractive for the risk averse. “Despite what
some may say, our property market has continued to maintain
a balanced global position with steady returns,” says Grant.
2
Upwardly mobile young professionals
seeking accommodation:
As many young South Africans continue to enter
the skilled labour market and seek to move out of
the family home, they are met with a demographic-specific
property shortage. “Young professionals are driving the
affordable housing market nationwide,” says Grant, “and due
to their preference for ‘lock-up-and-go’ units, they are the
property developers dream.”
“South Africa is consistently
included in the top holiday
destinations in the world,
and this combined with a
good exchange rate has led
to some tourists wishing to
make their connection more
permanent.”
3
High rental rates deliver profits:
On a similar note to the previous point, cash-
strapped millennials are increasingly choosing to
rent rather than buy in the South African property
market. “This is good news for property investors! Buying-to-let
helps you to pay off the bond while the value of the property
continues to increase over time — particularly in desirable
locations,” Grant explains.
4
Infrastructure in SA is still better than every
other developing country on the continent:
“Despite what the naysayers may say, our roads,
transport hubs and other infrastructure are superior
to some of our neighbouring countries like Mozambique or
Botswana. South Africa has direct access to the world’s major
economies, and most of the world’s biggest companies have
branches here.” Grant notes that this economic positioning has
led to an increase in foreign workers seeking accommodation
in the country.
5
Position as the tourism capital of the world:
South Africa is consistently included in the
top holiday destinations in the world, and this
combined with a good exchange rate has led
to some tourists wishing to make their connection more
permanent. “The influx of tourists has led to an increase in
short-term rental opportunities for property investors, often
at more attractive rates than those offered by local renters,”
explains Grant.
6
South African asset prices, particularly
property, are the most attractive they’ve
ever been:
Government is taking the necessary steps towards
ensuring that South Africa is as attractive as possible to foreign
investors. “These steps directly benefit local property investors
too. It’s definitely a buyer’s market at the moment,” says Grant.
“A lull in the housing market means that many homes are on
the market for far less than initially purchased for, which is great
news for first-time investors.”
7
Banks adopting a more lenient home loan
lending criteria:
Finally, one of the most compelling reasons to
invest in the South African property market in 2020
is that mortgage lending experts have observed a recent uptick
in banks adopting more lenient lending criteria for potential
buyers. “From an increase in conversion and approval rates to
requiring smaller deposits, this trend is really benefiting first-
time buyers,” concludes Grant.
GRANT SMEE ventured from financial
services into property investment and
property services in London before
returning to South Africa in 2010.
Today Grant is the Managing Director
of Only Realty, the founder of EPiC
Networking South Africa, OUST Eviction
Management Solutions, and a variety
of other innovative property solutions
start-ups.
SA Real Estate Investor Magazine MARCH/APRIL 2020
57