Foreign buyers are not the only ones finding great value in South African property – so are the international executives, professionals and diplomats who are renting homes while on assignment to this country.
“The drop in the value of the rand has made it almost ridiculously inexpensive for those earning in euros, pounds or dollars to rent property here, while also enjoying a relatively high standard of living,” says Andrew Schaefer, MD of leading national property management company Trafalgar.
“As a result, SA is becoming an increasingly sought-after posting for expats from all over the world, and the rising demand for the top-end rental properties that they prefer is creating some excellent investment opportunities.”
These are expanding, he says, in line with SA’s reputation as the best base for international corporations seeking to do business in Africa and as a leading diplomatic nexus, so the top choices of location are understandably the Sandton CBD and surrounds, Pretoria East and areas to the north of Durban around the King Shaka tradeport.
As for the type of property that is most in demand, Schaefer says that with security being a priority, upmarket apartments and estate homes are the main targets of foreign corporate and professional tenants, and that the rents for these compare especially favourably with those for similar properties in and around other major cities .
“For example, we currently have quality two and three-bedroom apartments to let unfurnished in exclusive Johannesburg suburbs such as Hyde Park, Atholl and Strathavon for between R15 000 and R20 000 a month, and for between R20 000 and R40 000 a month one can rent fully-furnished luxury two and three-bedroom apartments and penthouses in Sandown, Morningside, Hyde Park and Illovo”.
“By contrast, the average monthly rent for a much smaller (one-bedroom) furnished apartment in an upmarket area is currently £2450 (or about R52 300) in London, US$3800 (or about R58 000) in New York and €2650 (or about R43 500) in Paris, according to the Expatistan Cost of Living Index.”
When it comes to the estate homes which are usually preferred by expats with families, he says, there are many magnificent three and four-bedroom cluster homes with pools, garages and top-notch security to let in the suburbs close to Sandton for between R30 000 and R50 000 a month.
“Meanwhile, our research shows that while monthly rentals for luxury homes in the sought-after golf and lifestyle estates to the east of Pretoria – and those to the north of Durban – start at around R25 000 and range up to about R70 000 for palatial furnished properties with six and seven bedrooms, similar quality homes within easy reach of London in the UK would cost at least £5000 (R108 000) a month to rent and probably closer to £10 000 a month, while upmarket homes in the boroughs of New York City start at around US$8000 (R107 000) a month and range up to around US$30 000 a month.”
However, he cautions, property investors who intend to let high-end luxury properties in SA should ensure that they appoint excellent managing agents. “Corporate and diplomatic tenants are extremely particular and require high levels of service. In addition, landlords will need experienced help to be legally compliant when letting to foreigners.”