Sep 30 2007
Investors Look Globally For 2nd Homes
Posted in International Property, Property Finance
One only has to go to a local golf club or gym to meet some of the many Europeans that have retired to South Africa – enjoying our great climate … and their pensions made more favourable by the exchange rate. As travel and communication becomes more accessible, peoples choices of business and residence becomes less restrictive.
In Thailand I learned that US and European manufactures with plants (factories) in Vietnam had second homes in places like Phuket – so that their families could travel with them, staying at a Thai beach while they did the short commute to check on operations. Inexpensive health care and low (or no) taxes in places like Dubai and Panama are also attracting people.
I have traveled to property expo’s and conferences in US, UK, Dubai, and Spain; and the annual SIMA Expo in Madrid – which hosts the largest worldwide exhibition of property, represented by some 800 exhibitors from most countries covering 100 000sqm of floor space and attended by about 160 000 visitors – highlights how accessible investment and second home ownership is.
The SIMA Expo is like a huge supermarket open over a 4 day period for buyers to shop between the investment opportunities in Florida, Egypt, Russia, Italy, Panama, Bulgaria, Argentina, Greece, Estonia, … and the list goes on! An opportunity that should not be missed by South African property developers and property marketing companies.
Sellers, agents, and buyers (especially of 2nd homes) need to be thinking globally. The sale of the V&A Waterfront to the Nakheel Group, FIFA’s appointment of South Africa for the 2010 Soccer World Cup, and the interests of Barclays Bank and Richard Branson’s Virgin Group, etc. all highlight (both locally and overseas) the interest in the South African property market – which by world standards is generally reasonably priced and offers yields above those of most developed countries.
2 Replies to “Investors Look Globally For 2nd Homes”
Always interested in a new Project. I have a client in England that is interested in South Africa (long term). We will keep in touch.
A lot of my clients ask me about whether or not a non-SA citizen is able to get a bond to buy property in South Africa and I would love to address this common query. Non-SA Citizens are able to get home loan finance to purchase a property here but what percentage of the purchase price they are able to obtain depends on whether or not they actually reside in South Africa. The reason for this is as follows:
The Reserve Bank (from which all 4 major banks obtain the majority of their capital) has, for exchange control reasons, ruled that non-SA citizens are required to bring into the country as much money as they are borrowing. It is for this reason that the banks will only grant 50% of the purchase price to a non-SA citizen living out of South Africa and, therefore, earning foreign currency.
For a non-SA citizen who is actually living in South Africa and earning Rands (with a valid work permit and / or temporary / permanent residency) this rule, strictly speaking, is no longer applicable. For this reason, many non-SA citizens living and working here are able to get up to 100% of the purchase price (assuming they qualify for that size bond).
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