Today's foreign exchange rates make South African residential property available at big discounts

All estate agents with overseas connections should now get in touch with them and start promoting the greatly increased value that the current foreign exchange rates offer overseas buyers in South Africa today, says Mike van Alphen, National Manager of Rawson Finance, the bond origination division of the Rawson Property Group.

Quoting Currencies Direct, a foreign exchange organisation that the Rawson Property Group is closely associated with, van Alphen (at the time of the interview) said that a year ago one US dollar cost R7.50 and today it costs R9.00. A British pound would have cost around R12.00, today it is priced at R14.00 and the euro has appreciated even more markedly in relation to the rand today – by some 20%.

“The rand has, therefore, depreciated by 17 to 20% in less than one year,” said van Alphen. “This, in effect, means that the property a buyer looked at last year can now be had at a remarkable discount, not only because of the current exchange rate but also because, if it is in the middle and upper bracket, its price escalation over the last year will have been either minimal or non-existent.”

Van Alphen added that many middle and upper bracket homes have, in nominal terms, been discounted by 15 to 40% in the last three years. This again, he said, makes buying in South Africa now very attractive.

“It is,” he said, “sometimes alleged that South Africa is less than friendly to foreign buyers. This is not the case: our organisation can and does get 50% bonds and these are regularly available to foreign buyers throughout the market, provided that they are not self-employed or in work that is considered ‘risky’. However if they are retired they must be able to show that they have an assured income from reputable institutions – and since the easing off of the global crisis, this is usually not too difficult to prove.”

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