An introduction to buying property in South Africa


South Africa is one of the most beautiful and diverse countries in the world, with far more than its fair share of ravishing landscapes.

South Africa is a country of huge variety, offering something for everyone: magnificent beaches for sun-worshippers, beautiful unspoiled countryside and an abundance of stunning wildlife for nature-lovers, one of the world’s most popular cities (Cape Town), an abundance of mountains and countless miles of coastline for sports people, vibrant night-life for the jet set, fine wines for oenophiles, a range of cuisines for gourmets, rock art stretching back to the dawn of homo sapiens sapiens for culture vultures, and tranquillity for the stressed.

Few other countries in the world offer such an exhilarating mixture of beauty, culture, history, nature and friendliness. As a location for a holiday, retirement or permanent home, South Africa has few rivals. South Africans of all racial and cultural backgrounds tend to be open and welcoming, keen to introduce foreigners to their country and share its attractions; but also refreshingly realistic and honest about the challenges their country is facing. In addition to offering a wide choice of properties and generally good value, South Africa enjoys a pleasant climate for most of the year, particularly along the coasts.

Reasons to buy a home in South Africa

Despite the many excellent reasons for buying a home in South Africa, it’s important not to be under any illusions about what you can expect from a home there. The first and most important question you need to ask yourself is what you want a home in South Africa for? For example, are you seeking a holiday or a retirement home? If you’re seeking a second home, will it be used mainly for short or for long stays? Do you plan to let it to offset some of the mortgage and running costs? How important is the property income? Are you primarily looking for a sound investment? Do you plan to work or start a business in South Africa?

Often buyers have a variety of reasons for buying a home in South Africa; for example, many people buy a holiday home with a view to living there permanently or semi-permanently when they retire. If this is the case, there are many more factors to take into account than if you’re ‘simply’ buying a holiday home that you will occupy for only a few weeks per year, when it may be wiser not to buy at all! If, on the other hand, you plan to work or start a business in South Africa, you will be faced with a whole different set of criteria.

Can you really afford to buy a home in South Africa? What of the future? Is your income secure and protected against inflation and currency fluctuations? In the ‘80s, many foreigners purchased holiday homes abroad by taking out second mortgages on their family homes and stretching their financial resources to the limit. Not surprisingly, when the recession struck in the ‘90s, many people had their homes repossessed, or were forced to sell at a huge loss when they were unable to maintain the mortgage payments.

The property market

The property market in South Africa has been buoyant in the early 21st century, and property prices have increased annually by the following rates: 2000, 18.9 per cent; 2001, 14.5 per cent; 2002, 14.2 per cent; 2003, 14.5 per cent; 2010, 7.1 per cent (compared with average annual inflation of around 5 per cent). In some cities, fashionable resorts and regions prices have risen much faster than average. Nevertheless, there’s no guarantee that this trend will continue.

You shouldn’t rely on making a quick profit when buying property in South Africa, as you need to recover the costs associated with buying a home when you sell. You should look upon a property purchase as an investment in your family’s future happiness, rather than merely in financial terms.

Unless you know exactly what you’re looking for and where, it’s sensible to rent a property for a period until you’re more familiar with an area. As when making any major financial decision, it isn’t wise to be in too much of a hurry. Many people make expensive (even catastrophic) errors when buying homes in South Africa, usually because they don't do sufficient research and are too hasty, often setting themselves ridiculous deadlines (such as buying a home during a week’s holiday). Not surprisingly, most people wouldn’t dream of acting so rashly when buying a property in their home country! It isn’t uncommon for buyers to regret their decision after some time and wish they’d purchased a different type of property in a different region – or even in a different country!

SURVIVAL TIP Before deciding to buy a home in South Africa, it’s wise to do extensive research, study the possible pitfalls, and be prepared to rent for a period.

Further reading

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