Real Estate Investor Magazine South Africa September 2014 | Page 31

RESIDENTIAL

for well over R100,000/m², which is unheard of
anywhere else in the country, even in Johannesburg
where luxury homes now cost about R20,000/m².
And as long as there is demand for properties on the
Atlantic Seaboard, prices will keep going up.
The upmarket suburbs of Johannesburg, such as
Houghton and Hyde Park, also attract the interest of
foreign buyers with business interests in the country
and in Africa. These buyers prefer large properties with
immaculate gardens, suitable for entertaining business
associates and connections.

Q: Which foreign nationals are most active in the South
African property market?
LG: Our survey of all free-standing house sales on the
Atlantic Seaboard in the past 18 months has, for the
first time, given a comprehensive snapshot of precisely
where buyers originate.
The main buyer market is African at 79% of sales
or 125 buyers, who spent R1.36 billion. A further
analysis of the African market shows that 95% (or 120
buyers) were South Africans who purchased property
to the value of almost R1.26 billion. These are often
South Africans who are bringing back offshore money.
The other 5% comprised buyers from Angola, Congo,
Zambia and Nigeria, who spent R69.4 million.
Mainland
Europe
remains
a
significant
international source market for property sales on the
Atlantic Seaboard. European property investors have
spent €21.9million on homes in this area. Mainland
European buyers made up 12% and purchased property
for €13.8million (R203m) and the United Kingdom
accounted for 7% for the buyers, spending €8.1m
(R119.33m). The remaining 2% are from the UAE
(1%) spending R21.15m and the Far East, spending
R12.375m.
As far as the European countries are concerned,
French buyers are tops with 31% of the region’s
spend, which translates to €4.3m (R63.4m) in sales.
Next is Switzerland at 16% buying property worth
€2.19m (R32.25m), followed closely by Belgium
at 15% (€2.16m or R31.75m) and Germany at 12%
(€1.61m or R23.7m). The remaining 26% of mainland
Europe’s buyers come from Denmark, Italy, Sweden
and the Netherlands, and they collectively spent €3.5m
(R51.9m).
The majority – in fact, more than 80% of the buyers
- are also cash buyers. This is unprecedented in the SA
residential property market.
www.reimag.co.za

FOREIGN LAND OWNERSHIP
UNDER THE SPOTLIGHT
Gugile Nkwinti, minister of Rural Development and Land Reform
recently said that the South African government will forbid
foreigners from buying land within five years, but will not
expropriate those who already possess deeds, conceding that
it would be difficult and possible unconstitutional to make the
law retrospective. According to the minister, the principle is that
foreign nationals should not own land but should have a longlease with a minimum of 30 years. The government will table a
law to this effect in parliament by the end of the year, but this
probably will only affect foreigners after the end of the current
administration in 2019, according to Nkwinti.
September 2014 SA Real Estate Investor

31