Foreign buyers look to take advantage of economic turmoil in wake of coronavirus
South Africa’s exchange rate has long been favourable to foreign property buyers but the dropping value of the rand amid the Covid-19 situation and economic turmoil has made the land even riper for international property investment.
Foreigners who viewed properties prior to the pandemic have reignited their interest in buying over this lockdown period, while new and experienced buyers are also looking to take advantage of the exchange rate, says Richard Huxham-Hardie, chief executive of Knight Frank.
These buyers’ roots vary from the UK to the Middle East and they are generally buying property up to R20 million. The agency’s latest deal was a property in Newlands, although there has also been “strong interest” in homes in Constantia and Hout Bay.
Once lockdown is over, it is possible that foreign buyer interest will increase further, although the South African winter is traditionally a slower time for these buyers.
“However, it will actually be the ideal time to buy before the demand surges in the last four months of the year,” says Huxham-Hardie. “Undoubtedly, in Cape Town you will find the Johannesburg buyers taking advantage of the opportunity to buy properties at a good price.”
A “considerable number” of enquiries have come through Greeff Christie’s International Real Estate international websites, says chief executive Mike Greeff.
This significant buying interest through the lockdown has been a result of the Moody’s downgrade and resultant weakened rand. “Despite these challenging times, it is still a prime opportunity for foreign investors and buyers are looking for a good deal,” says Ashley Barnes, the agency’s area specialise for Constantia Upper, Kalk Bay and St James.
“There has been a great deal of interest in Constantia Upper, where prices generally range from R8m to R50m,” he says. Greeff is optimistic that there will be an increase in foreign investment after the lockdown is lifted.
The agency’s Tim Greeff adds: “Property prices are at their most favourable. It is never going to be as easy to get a home loan as it is now, so strike while the iron is hot.” The Cape Winelands is a popular destination for foreign buyers and, prior to the lockdown, had seen an increase in enquiries, says Chris Cilliers, chief executive and co-principal in the area for Lew Geffen Sotheby’s International Realty.
A number of “very interested” buyers are planning to come to the country to view properties found online once the travel ban is lifted. “These range from people looking to move permanently to South Africa, swallows looking to spend the summer here and purchasers of large commercial farms. They are all keenly aware that, with the current pricing and exchange rate, it’s perfect for acquiring property here.”
Cilliers says recent enquiries have come from buyers all over Europe, with the lion’s share being German, Belgian, Dutch, French, Scandinavian and Swiss.
In Cape Town, secure estate homes are also attracting interest, says Dave Burger, secure estate specialist for the group in Constantiaberg. “The moment there is more certainty regarding the future of the virus, I expect that we may well see more investment as the interest is there.