Real Estate Investor Magazine South Africa October 2016 | Page 57

relatively cheap to get stuck into the UK for those who
wish to go offshore.
Looking abroad is a good option; I see 7-9%
devaluation per annum in the Rand in the long-term.
As a South African, you should take advantage of the
SARB’s offshore allowances which, in total, allow you
to transfer R10 million out of the country per year.
I stress urgency in this regard because, given the
ANC’s precarious electoral position, it would not be
shocking if the ruling party decided to move policy
toward a more business-unfriendly space. Doing
so could include bringing back some of the capital
and exchange controls that have been slowly (and
thankfully) abandoned over the last 15 years.

This is more than double the current inflation rate
over the same period. This rate of growth is the third
highest in the world according to international real
estate agency Knight Frank.
A decline in the demand for property in the city is
unlikely to happen any time soon. National migration
remains high as South Africans flock to what is
arguably the best run city in the country. While there
are the inevitable talks of a property bubble forming,
they seem premature if not totally off the mark.
Demand for the limited property near the city centre
will remain high, or at least stable, for the foreseeable
future.

What if you want to stay invested in South
Africa?

It’s easy for private investors to get carried away in
heady forex markets. Short-term news and short-lived
calamities abound in the 24-hour news cycle and
many people have lost a lot of money chasing currency
fluctuations.
It’s always better to have a long-term plan based
on fundamentals than following the advice of
news stories and punters. The key to any strategy is
diversification, both offshore and locally, of your
investments. Without a long-term plan, you are likely
to fall victim to the short-term fluctuations that seem
so alluring.

If you’re a South African who wants to stay invested
in South Africa, you will have to think very carefully
about what kinds of asset classes are least at the
mercy of Rand declines. Traditionally, property has
functioned as a good store of value for local investors
and while my advice would be to diversify your assets
offshore, if you’re going to invest in South Africa, you
could look at property in high-growth urban areas.
Looking at the example of Cape Town, we see a
property market that has increased in value at an eyewatering 16.1% between June 2015 and June 2016.

A final word of caution

RESOURCES

Sable Forex
www.reimag.co.za

OCTOBER 2016 SA Real Estate Investor

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