For a while, it seemed an overwhelming majority of South African headlines were negative — poverty, HIV/AIDS epidemic and horrible crime rates. These issues still plague the country but it is pressing forward with wobbly confidence as its getting ready to host the 2010 World Soccer Cup. South Africa is anxious to show itself as an emerging leader.
Cape Town, the country’s most livable city, has always been loved by those who know it. “I have traveled around the world extensively and I believe Cape Town is the most beautiful city on the planet,” said Julian Reynolds, CEO of Dorr Estates — a real estate investment group in South Africa. It has everything an urbanite could possibly ask from nature: mountains, beaches, sunshine and vineyards. “It is amazing how good you feel waking up in the morning to such fantastic scenery,” said Reynolds. The city also has an impressive array of restaurants, boutiques and shops that could make even the most experienced of hedonist blush.
The British have been buying vacation homes in Cape Town for decades. As the trend of purchasing international property grows, more and more people are casting their eyes towards this African gem. South Africa’s scary crime statistics may deter some but expatriates from the world over are finding their way there.
Besides, insiders assure visitors the crime problem isn’t really that bad. It depends on the area but tourists won’t face anything worse “than the usual issues travelers find all over the world,” said Steven Deli, a RE/MAX Living Atlantic Estate Agent. “South Africa does have crime issues, and the Western Cape [Province] does have a bad track record overall,” said Reynolds but, he reiterated, “crime is largely isolated to specific bad areas.” This leaves a majority of the city safe.
Take the crime statistics out of the equation and you will find a city that has everything that attracts foreigners going for it. Advantageous exchange rates means its sunny climate, stunning natural beauty, diverse cultural attractions can be enjoyed at reasonable prices. The fact that English is widely spoken is also a plus.
About Cape Town
Stretching over some 900 square miles from the shores of Table Bay, Cape Town, South Africa’s legislative capital and second largest city, is reputed to be the most popular tourist attraction in Africa. In addition to the gorgeous Atlantic waters and a stunning variety of things to do, landmarks such as Cape Point, Table Mountain and the 70 other peaks within the city limit that measure over 1,000 feet keep tourists coming.
Its 3 million residents enjoy a Mediterranean climate that closely correlates to San Francisco weather but with a little more sunshine and a bit less drizzle and wind. Temperature wise however, Cape Town beats San Francisco hands down with an average of 66 °F versus 55 °F. Visitors don’t stick out as much in Cape Town as it is among the most multicultural cities of the world. It is as culturally diverse as other major urban destinations such as New York or London. This is a bit unusual for a city in a developing country but is a welcome relief for ex-pats who value their anonymity and don’t enjoy being pinned down as the foreigner wherever they go.
Cape Town plays an important economic role not only in the South African context but on the African continent as a whole. With over 1.5 million visitors recorded in the Western Cape Province, tourism is a fast expanding sector that employs roughly 10 percent of the province’s population. “Cape Town is one of the world’s leading tourist destinations,” said Deli, who also owns a real estate information website (www.capehomes.info). The 2010 FIFA World Cup tournaments will only cement its position as a premiere global destination.
Real Estate in Cape Town South Africa
While the Cape Town property sector has always been regarded well, South Africa’s selection as the host of the 2010 FIFA World Cup has done wonders for it. The city’s has seen a flurry of activities in the Central City area and that that has led to optimism, according to Pam Golding Properties. This positive sentiment has in turn resulted in a demand jump. That said, some 60 percent of sales are still cash based reflecting “banks’ conservative lending policies that make obtaining mortgage finance difficult,” according to Laurie Wener, a Pam Glolding Properties Managing Director.
The most popular areas are those that are within 30 minutes of the Victoria and Alfred Waterfront, which is in central Cape Town, according to Deli. “These areas include the Atlantic Seaboard, the West coast and the southern and northern suburbs,” he said. Prime beach areas such as Clifton, Camps Bay, Green Point and Franschhoek in the wine country all command top prices ranging — from $100,000 on the low end to upwards of 10 million — according to Reynolds.
Foreigners want properties in good locations “with views, easy maintenance, and good security,” according to Wener. However, it is not true that all foreign buyers acquire “top end properties for excessive prices.” In addition, the global financial crisis has cut the number of international buyers in the city. “There are very few foreign buyers at the moment, probably due to an unfavorable exchange rate and the global recession,” said Wener.
Buying property in Cape Town
Foreigners are allowed to buy property in Cape Town, according to Dorr Estates. “There is no restriction on foreign ownership of property in South Africa,” said Reynolds. “There is, however, a tax that is levied on non-residents when they sell their property.” While non-residents selling a property in excess of 2,000,000 Rand (roughly $270,000 in current exchange rates) are subject to this tax, the South African Revenue Service “often provides directives allowing sellers to forgo [paying it].”
Financing is available to foreigners too but with limitations. “A non-South African can only obtain up to 50 percent mortgage financing,” said Deli.
The FIFA World Cup is expected to do good things for Cape Town. Most visitors to Cape Town leave wanting to return, according to Wener. “We are expecting the [world cup’s] effect to be positive in the medium to long term rather than short term,” she said. While sales have stagnated this year, “the property market along the Atlantic Seaboard has grown steadily over the past decade,” Deli pointed out.
“There several fundamentals that ensure that the region is more pleasant to live in and appeals to foreign investors,” said Reynolds. Not only is Cape Town beautiful and has a lot to offer to would be investors and retirees, it also enjoys good governance, according to Dorr Estates. “The efficiency of government in the [Western Cape] is far superior to other provinces.”