Expatriates underpinning Umhlanga prices

Durban (June 05) - Steady buying interest from expatriate South Africans is one of the drivers of the Umhlanga property market which has seen the average selling price increase from R1 267 483 in the first quarter of 2006 to R1 356 494 over the same period this year.

Quoting figures from PropValue’s recently released first quarter survey, William Campbell, franchise owner of Lew Geffen Sotheby’s International Realty Umhlanga, said this was despite the tendency by sellers to over-price their properties by up to 30 percent more than current market value.
According to the SA-CONTACT website, most South African expatriates are to be found in the UK, Australia, Canada, New Zealand and the USA. It also reports large contingents of expatriates living in countries such as the Netherlands, Namibia, Russia and even Iraq.

Campbell’s son Grant Campbell, who heads up the office’s specialist expatriate division, says that while many South Africans have emigrated permanently - (a report from the South African Institute of Race Relations (SAIRR) in September 2006 puts the figure at one million over the past 10 years) - thousands more are working overseas on a temporary basis. Intending to return home to live one day, they are using their overseas earnings to fund property purchases in their home country. “The strength of the currency they are earning, which in the majority of instances is the UK pound, is making the purchase of South African properties very affordable for them,” he says.

He attributes the steady increase in expatriate buying to the Internet. “Today’s buyers are educated people who confidently use the Internet to bridge the gap between countries as they shop around for property. Most, if not all, intend returning home to live at some stage, he says, hence their interest in buying property at today’s prices.

Those able to pay up to R4 million usually choose houses or townhouses they intend to eventually live in. “Until then, they let them out using the rental incomes in conjunction with their overseas earnings to pay off their bonds in the shortest space of time.”
Singles and young couples usually buy for up to R2,5 million, which translates to either a two or three bedroom flat or a small house in or around Umhlanga.
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