Foreign buyers have traditionally been attracted by the relatively low cost of property compared with that in many European countries. However, prices have risen considerably in the last few years, particularly in the cities and coastal regions, and property in the most popular areas is no longer as much of a bargain it once was, which can come as a surprise to newcomers. In fact, there are few bargains left, except in remote areas.
Nevertheless, property in South Africa remains good value compared with that in many other countries (sometimes very good value), particularly rural properties with a large plot. A slice of South African sunshine style needn’t cost the earth, with the average house price at the end of 2009 estimated by the FNB House Price Index to be R779,546 (€80,823), although the average price in the desirable areas of the cities and coastal stretches favoured by foreign buyers was considerably higher.
The average price in Cape Town was put at R1,7 million (€176,200) and much higher in the best areas of the city. Whereas a modest, detached property in Cape Town can cost as little as R370,000 (€38,300), you will have to pay a minimum of around R2,170,000 (€225,000) for a similar property in a trendy marina area of the city. And for those with the financial resources the sky’s the limit, with large, luxury apartments and houses in the best areas of South Africa costing many millions of rand.
If you’re seeking a holiday home and cannot afford to buy one outright, you may wish to investigate a scheme that provides sole occupancy of a property for a number of weeks each year rather than buying a property. Schemes available include part-ownership, leaseback and time-sharing.
Don’t rush into any of these schemes without fully researching the market and before you’re absolutely clear what you want and what you can realistically expect to get for your money.