Real Estate Investor Magazine South Africa November 2015 | Page 59

The UK economy is growing at 2.8% p.a., the
US economy slightly faster and we are stuck on 0%
(annualised, just don’t think about the -1.3% in quarter
2 of 2015). Whilst not, thankfully, at the gung-ho
debt-driven levels of 2004-7, there is confidence,
especially in retailing, and it is this confidence that
underlies the flood of money, much of it foreign, being
put into UK and US property. Contrast with SA,
where the consumer confidence index is at its lowest
ebb since 2009. Confidence is a wonderful thing. It
makes people and businesses happily invest in countries
with interest rates of next to nothing rather than the
obviously higher returns available here. The perception
www.reimag.co.za

is that interest rates in the developed world will rise
eventually and that any short-term exchange rate loss
will be offset by longer-term stable income generation
in a growing economy.
Make no mistake – UK and US property is expensive
in rand terms. However, if you take a long-term view,
it’s all in your mind, though that mindset has to be
of a portfolio, rather like Redefine, that is large and
diversified. Don’t put all your eggs in an overseas
basket.

RESOURCES
Horizon Valuation
NOVEMBER 2015 SA Real Estate Investor

57