Emigration-driven sales are on the rise, accounting for 14.2% of all sales in the Q1 2019 FNB Estate Agents Survey. American company, Pew Research, revealed that the most popular destination for South African expats was the United Kingdom, with a total of 210,000 living in there in 2017. This was closely followed by 190,000 South African expats living in Australia and further 100,000 living in American states.
“Emigrating is a bold step to take. If you are planning on purchasing property when you reach your destination, I would encourage you to do your research to find out if there are any laws prohibiting or restricting immigrants’ ability to own property inside that country. It is also incredibly difficult to purchase a primary residential property if you do not live in that country. My advice to our expats would be to rent for a few months and explore their surroundings before deciding on where to purchase a permanent home,” advises Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
To provide buyers with a glimpse into local market conditions inside the top three destinations for South African expats, RE/MAX affiliates across the globe provide a short market review on the state of their own property markets.
An attractive Australian market
Sydney is one of the most recognised capital cities in the region with its iconic Sydney Opera House and Harbour Bridge. Melbourne is another, being regularly voted the world’s most liveable city. At the end of June, the median house price in Sydney was roughly AUD$780,000 and in Melbourne AUD$620,000. Brisbane had the next highest median at around AUD$486,000.
“Generalising across all Australian markets, we are emerging from a property downturn that commenced around 18 months ago due to a variety of fiscal, political and regulatory factors. Sydney and Melbourne were the hardest hit. By the end of this year, the market is expected to stabilise – we are already seeing this on the east coast – and moderate growth should follow in 2020. With the prospect of a market moving forward, investors are seeing opportunity now, and looking, for example, at established apartments in the eastern suburbs, lower north shore and inner west. Melbourne is one of the ten fastest-growing large cities in the developed world. While it is currently a fragmented market, we are already seeing prices pick up in a number of areas. Similarly, Brisbane has a very healthy outlook. Its housing affordability is very favourable, and investors are finding yields attractive. Our Australian scene is one of falling interest rates and rising consumer confidence. The banks are lending, and things have settled on political and taxation fronts. Many property markets across the country are heading in a good direction,” says Josh Davoren, Director of RE/MAX Australia.
Tough buying power in the US market
Florida and California are the two states in America with climates most similar to that of South Africa’s, which makes them the most desirable states for South African expats. Looking at some of the popular suburbs in California, the Median Sales Prices for July 2019 indicate that a home in LA will cost around US$510,000. Prices climb to US$955,888 when looking at the San Francisco market. Prices are somewhat more affordable in Florida, with the Median Sales Price in Miami being US$304,900 and US$255,000 in Orlando. However, according to Chip Brekken, Director of Global Development at RE/MAX LLC, the current exchange rate for the South African Rand to the US$ will make for tough purchasing power for South Africans buying in the US.
Costly Living in the UK
London is often referred to as the miniature South Africa – sadly though, property here does not come cheap. A studio apartment in Prime Central London costs around £300,000. If you’re really lucky, this might also afford you a one-bedroom flat. Many prefer to purchase property on the outskirts of town and commute into the city. For example, areas such as Watford offer better value for money but are within 20 minutes of the city by train.
“For the Prime Central London market, invest in smaller properties, such as one or two bedrooms rather than larger – that would be my advice at present. Don’t be frightened to go a little out of the center of the city as there are very good yields to be had from areas that are easily commutable,” says Roger Collings of RE/MAX Central.
If you are planning on immigrating, Goslett advises against rushing into any long-term investment decisions until you have a more thorough understanding of the local property market.
“I would recommend that you speak to a real estate advisor who has global connections and can put you in touch with somebody who knows more about the local market,” Goslett concludes.