Tourism minister Derek Hanekom announced positive changes to the controversial visa regulations in late October. The minister said to limit the impact current regulations have had on South African tourism and economic growth, it would no longer be mandatory for inbound travellers from visa-exempt countries to carry unabridged birth certificates for children travelling with them.
Laurie Wener, Pam Golding Properties’ MD Western Cape, said these recommendations should offset concerns about South Africa’s stringent visa regulations having a negative long-term effect on South African’s property market. “We are delighted that processes have started to have a more user-friendly system. This will give us an added reason to market properties in the summer months, the traditional international buyer season.”
Wener said less than 10% of Atlantic Seaboard property is owned by foreign investors. “But all foreign investment is important. Only 15% of sales in the Atlantic Seaboard are to foreigners between December to March (when most sales to foreigners are achieved). So while the direct effect on property is actually very low and quite limited to certain pockets, these buyers contribute substantially to the economy in many ways.”
In early October, Seeff’s managing director for the Atlantic Seaboard and City Bowl Ian Slot, announced that sales to foreign buyers across Cape Town’s Atlantic Seaboard and City Bowl were down by more than 30% year-on-year, despite attractive pricing facilitated by the slump in the value of the rand against the pound sterling, euro and dollar.
Said Slot: “This seems to mirror the reduction in tourist numbers and one has to assume there is a correlation between the two. Our experience has been almost universally that foreign buyers make the decision to buy when they are actually in Cape Town, so if they are not here they are less likely to buy. The Atlantic Seaboard and City Bowl top the list for foreign buyers looking for second homes on the continent, comprising of about 20%-30% of the sales activity for these areas over the last two years.”
After seeing a ‘notably downward curve in sales to foreign buyers’ from April/May onwards, Slot estimated a potential loss in turnover of up to half a billion for 2015.