Keep your money in SA property, says Geffen

The rand may have strengthened and overseas property prices may have fallen, but South African real estate is still the best option for upmarket investors.
So says Lew Geffen, chairman of Sotheby’s International Realty in SA, who notes that SA high-end properties are still well priced in world terms - and that the local market also offers arguably better potential for gain at the moment than just about any other, because of the country’s relatively stable economy and expanding middle class.
“We also have the climate, lifestyle and infrastructure to appeal to the top echelon of property investors from around the world.”
With a global network of offices, he says, Sotheby’s International Realty is uniquely placed to conduct comparative pricing research in the luxury property sector, and its latest survey reveals, for example, that prime waterfront properties on Cape Town’s Atlantic Seaboard or the north coast of KwaZulu-Natal can be acquired for less than a third of the cost of similar homes in Sydney.
“The research also shows that for the R1,3m average cost of a tiny studio flat in central London – a favourite city for SA-based investors – one could acquire an ultra-modern loft apartment in central Cape Town, or a three-bedroom apartment right on the beachfront in trendy Seapoint.”
Similarly, the R2,6m price of a studio flat in Manhattan, New York would also buy a two-bedroom, two-bathroom townhouse in Houghton, one of Johannesburg’s most sought-after addresses, or a three-bedroom house with a separate cottage in the leafy suburb of Parkhurst.
And while the still-depressed US property market no doubt offers many excellent properties at “bargain” prices, the cost of a three-bedroom home on the beach in Malibu, California (R14,5m) is still much higher than that of a brand new architect-designed townhouse on the beach in Camps Bay (R10m) – or for that matter, a seafront farm in beautiful Plettenberg Bay (R12m), says Geffen.         
“Also increasingly popular among investors are income-producing properties such as guesthouses and lifestyle farms, both of which SA has to offer at very competitive prices. For example, we are currently marketing a five-suite guesthouse in Ballito for R4,8m – considerably less than the cost of a similar property on Siesta Key off Florida in the US (R8m).
“As for lifestyle farms, you can buy a small wine estate with a three-bedroom home in Franschhoek for around R30m, compared to R74m for a similar property in Napa Valley, the wine-growing area of California.”
It is no wonder then, he says, that the demand for SA property continues to grow among savvy overseas investors – or that many local investors who might have been expected to respond to the stronger rand by buying property abroad are once agin starting to accumulate portfolios of SA real estate instead.

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