Buying property in South Africa

A growing market

The property prices for properties in South Africa are moderately volatile. In the past years the average price for a house increased by 20 percent and this year the expected increase is approximately 12 to 15 percent.

The prices of the top-end studios and apartments in Cape Town have doubled or even tripled in the past three to four years. However, keep in mind that these growth rates are particularly for the more popular parts of South Africa. For the less popular parts of South Africa the growth rates are not as high.

However, it remains very important to be informed correctly by trustworthy independent real estate agents, qualified advisors or professionals who have a decent knowledge of the country, culture and market developments.

Just a few years ago properties where sometimes placed on the market against a very high valuation. This was due to a relatively strong market. In some cases the valuation was even twenty to thirty percent higher than the actual market value. At present similar practices are rare, but it never hurts to do some research. What helps in the first place is to be up-to-date yourself. You can do this simply by reading magazines and articles related to South Africa and articles and magazines about the South African property market in particular.

You might want to have a look at the following checklist:

Another interesting issue is the financing of your property in South Africa. As a non-resident of South Africa you are eligible for a mortgage for your new South African property. Multiple banks offer you the opportunity to finance your second home in South Africa and are willing to finance up to approximately 50 percent of the purchase price of the property. Banks obviously have several requirements and these are mainly income related. After your application for a residence permit is approved you will be able to finance a substantial higher percentage of the property value.

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