When it comes to property prices, what South African’s perceive as fairly expensive, are seen completely differently by tourists and even quite cheap to some, particularly those from the UK and Europe, says Michael Bauer, managing director of IHPC estate agency.
Having been in touch with many German tourists over the last few weeks, and with the numbers steadily increasing, Bauer says it is interesting to see how some who have visited Cape Town will definitely be returning and some are indeed looking to buy here.
“If you consider that if you are a foreigner buying SA property, it is almost 50% cheaper than it was a few months ago, and if someone were to take, say €200 000 and spend it on a holiday home here, it is an easier sum to risk or take a loss on, if that unlikely event should occur,” he said. “€200 000 currently gets you a home worth around R2,9 million, and anyone looking in this price category would be able to buy a fairly decent home.”
While it may not get the buyer an apartment with a sea view or a Clifton bungalow, there are many properties in this price bracket for those looking, he said.
“In Seapoint, for example, there are apartments for sale at around R2,5 million which have two bedrooms, two bathrooms, as well as being within close proximity to the sea and many amenities. For this amount in Germany, there is hardly anything available, unless it is in an area that is not as popular,” said Bauer, “and in Spain, €500 000 is probably what would need to be spent to be able to buy something decent.”
“South African buyers often underestimate how favourable the property market is for locals: the fact that we can get 100% bonds is the first major plus whereas in Europe this is unheard of. The most anyone applying for a bond there would get is an 80% loan. The other thing that South Africans forget about is the assets this country has, the 3 000km of coastline, the game parks and nature reserves inland. Cape Town is still marked as one of the most beautiful places to live and many see this town as very European.”
“With the increase in tourism, I believe strongly that many of these people will invest in property here,” he said. “The fact that the exchange rate is so much in their favour could tip them in the direction of buying here whereas before they may have thought it slightly too much for them to set aside for a holiday home. An example of this is the increasing numbers of German kite surfers who have bought property in Blaauwberg and Tableview, specifically because of the good kite surfing and wind surfing opportunities in this area, whether on the open sea or on Flamingo Vlei.”
Foreign demand for property in prime areas is likely to increase and as the world becomes closer knit and more of a global village, it will make it even easier to travel from country to country, said Bauer. Many international airlines are offering cheaper flights, with some from Europe to Cape Town around €790 and as the numbers of tickets booked increase, so the prices will come down even more.
“South Africans, particularly Capetonians, should look at this long term earning possibilities from all of the foreigners coming in, and work consistently towards growing the tourist numbers,” he said.