Foreigners bought nearly Rand 9.7 billions (US$ 867 million) of luxury properties in South Africa the past 12 months. Of the 280,395 properties transferred between 2013 and 2014, nearly 8,530 were registered in the name of foreigners, according to property analysts Lightstone.
The fact that general elections in May went off peacefully played a major role in building trust among foreign buyers. The depreciation of the rand over the past two years has also made properties in South Africa more attractive to buyers from Europe and the UK.
Nearly 7% of land is currently owned by foreigners, according to government estimates, mostly from Europe.
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The percentage of foreign home buyers from countries such as Cameroon, Nigeria, Zimbabwe, Angola and Mozambique rose from 16% in the third quarter of 2013 to 19.5% in the first quarter of 2014, according to First National Bank.
Bowing to popular concerns, the South African government plans to impose restrictions on foreign investment in real estate by introducing a bill which would allow a foreigner to lease land, but not buy it. The bill will limit the period of lease to 30 years only.
The Regulations of Land Holdings Bill may take another five years to become law as the administration will need to conduct a land audit to ascertain the race, gender and nationality of current owners.
This article was republished with permission from Global Property Guide.