Don’t price for foreign buyers

According to data from PropStats, foreign buyers do not make up as large a proportion of buyers on the Atlantic Seaboard as many suspect.  However, many sellers continue to price their properties as though foreign buyers are queuing up to buy homes in Camps Bay, Sea Point, Greenpoint, Bantry Bay and Clifton.

Says Glenda Luitingh, sales manager of Jawitz Properties Atlantic Seaboard: “this reflects a general trend in many popular suburbs of Cape Town, where sellers are asking for higher prices than the market will actually bear.”

Of the 435 properties that changed hands from January to end July of this year, 73 were bought by foreigners, or just under 17%.  This figure is on par with the figure for the first seven months of 2015 when 72 of the 405 properties sold in the area were sold to foreigners, or just under 18%.

“There is a perception that the weakness of the rand has resulted in a crush of international citizens snapping up prime local properties.  But we need to remember that foreigners are very sensitive to political and economic uncertainty, which South Africa has experienced a great deal of  especially since the middle of December last year,” she says.

‘Foreigners’ of another kind are the ones swooping into the Cape Town market. “These ‘foreigners’ are from other provinces, particularly Gauteng and KwaZulu Natal.”

This is known as ‘semigrating’ and it has been going on for years.  “However,” says Luitingh “where once it was primarily retirees coming to the Mother City and its environs, gradually more and more younger families have been packing their bags and heading south.”

Excessive crime in cities like Johannesburg is one reason for this trend, but so is the perception that the Western Cape is better managed than the other eight provinces. In addition, technology has made it much easier for people to work remotely, while cheap flights have resulted in a host of weekly commuters.  “Just a two hour flight and a quick trip on the Gautrain and you can be in your office in Sandton,” she adds.

Another interesting statistic from PropStats for this year to date, is the split between properties bought with cash and those bought using a bond facility. “Cash continues to dominate transactions, which is interesting given the cost of buying even a small one bedroom apartment on the Atlantic Seaboard,” Luitingh says. 

“There is also an increasing number of buyers coming from other countries on the African continent.  But to date, the majority of buyers originate from Europe,” she concludes.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 24 May 2018
      Most real estate professionals agree that 2017 was one the toughest years to date; an eminently challenging 12 months that subdued even the strongest markets - including the country’s economic powerhouse of Sandton.
    • 24 May 2018
      These are uncertain and challenging times for the real estate industry, but the non-profit organisation Rebosa is fighting for their interests and finding pragmatic solutions to industry issues such as the urgent need to fast-track transformation says Richard Gray, Rebosa chairman.
    • 24 May 2018
      The decision to invest in property isn’t one that’s taken lightly, or dealt with flippantly. The same should ring true when deciding on an estate agent partner to handle the letting out of your property.
    • 23 May 2018
      Homeowners who are thinking of selling and “trading up” to a bigger or a better home had better be quick now if they want to get the best deal.
    • 23 May 2018
      The new Loftus Park development in Arcadia is really going to boost the demand for homes and rental accommodation close by and the neighbouring suburb of Sunnyside, says Gerhard Kotzé, MD of estate agency group RealNet Holdings.
    • 23 May 2018
      The importance of correctly pricing a property for sale is more imperative than ever. This is according to Debbie Justus-Ferns, divisional manager of Renprop Residential Sales, who says that despite this crucial selling fact being emphasised so often, in the current market, many sellers are still expecting unrealistic prices for their homes which is having a negative impact on the ultimate sale price.
    • 22 May 2018
      Extreme weather appears to be the new normal, evident by the volume of insurance-related disputes reaching the industry watchdog’s desk. To avoid a situation in which your insurer refuses to pay up, you should proactively ensure that your home is well-maintained and ready for whatever winter has in store.
    • 22 May 2018
      As the impact of technology on the real estate industry becomes more significant, it is clear that there is a need for an objective look at not only traditional real estate models but also online and other alternative low-commission real estate agencies, to examine what they offer and what their impact might be.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us