Now that South Africa is part of the BRIC, the nation solidifies its reputation as an emerging real estate market to watch and increases its allure to overseas investors. Developers are catering to buyers seeking strong, stable returns on prime property and are eager to dispel doubts about the rand as a sound currency. See the following article from Property Wire for more on this.
Confidence is returning to the South African real estate market and the country’s inclusion this year in the BRIC group of major emerging markets is set to boost foreign investment.
South Africa’s inclusion into the group that currently includes Brazil, Russia, India and China, means it will become BRICS and legitimizes South Africa as a future global power.
According to the latest Sage Property Report from the Standard Bank, one of the largest banks in Africa, confidence in the South African property market is returning with an 8.3% year on year growth rate in the median property prices in August following a 7.3% rise in the previous month.
Despite the recession, Clifton on the sought after Atlantic seaboard coast, which is rated the top suburb in South Africa, saw prices rising by 48% last year to an average of R16.2 million.
Property developers Lace Market Management, originally formed in the UK in 1991, has focused its attention on exclusive developments predicts that foreign buyers will be attracted by the inclusion in BRICS.
‘We came here 10 years ago, fell in love with the Cape and wanted to spend time here. As property investors, this location and lifestyle would have been the ultimate buy for us when we came here in terms of investing money, getting a return and getting usage,’ said David Higginson, who founded the company with his brother John.
They sell to foreign and local investors looking for a blue chip property investment with solid returns. One offering is Ebbtide which consists of ultra modern, north facing units that feature energy conserving devices such as smart lighting and tinted glass paneling, and generates its own electricity which is stored in batteries for uninterrupted power supply in emergencies.
‘Over 10 years we’ve built a niche clientele which trusts our product’s offering. They know that when they come here, that this is actually something pretty special and they know they’re going to get good service. We have people coming from Johannesburg two or three times a year, and Europeans coming once a year,’ he explained.
‘The big slingshot effect we’ve had over the past five years where property prices jumped by 50 to 60%, which I don’t believe is healthy for any environment, has stabilized now, and top blue chip property investments should stabilize to between 8% and 12% and I think that’s a very fair assumption to make, and quite conservative at that,’ added his brother.
‘The fundamentals of the South African property market are sound. But we’re not only after growth. We are investing in key areas. Camps Bay, Clifton, Bantry Bay are all key areas for us,’ he added.
‘South Africa’s inclusion into the circle of BRIC countries is only going to strengthen the attraction for investors,’ explained David. He dismissed concerns about the volatility of the rand. ‘This is perhaps the biggest concern for a foreign investor. Yet, the rand has been one of the best performing currencies in the past three or four years and it has been pretty stable. I always say that by bonding 50% you are hedging your currency, and there is a way of forward buying as well,’ he said.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.