In a recent report, First National Bank (FNB) property economist John Loos said that agents had reported a rise in foreign buying of domestic property.
Annette Evans, regional general manager of the Institute of Estate Agents Western Cape, said this could be corroborated when analysing a sample of transactions on PropStats, the institute’s online residential property data service.
PropStats’ data was taken from agents in the Western Cape, predominantly in greater Cape Town. Comparing sample figures from June 2011 to June 2014, she said, sales to foreign buyers had risen steadily: there were 14 sales in mid-2011, 26 in mid-2012, 37 sales in mid-2013 and 43 in mid-2014.
Although the figures would change from month to month, in most cases they were similar, she said.
The FNB report stated: “With South African property now a lot cheaper for foreign buyers than a few years ago, some would perhaps say that it wouldn’t be surprising to see an uptick in the levels of foreigner buying in the local market. And indeed, this is what we appear to have been seeing. From a low point of 2% of total buying at a stage of 2010, the survey respondents have gradually raised their estimation of the foreigner buying percentage to 4% by the first half of 2014.”
“PropStats’ management reports, which are available online to principals of property companies, have been very useful in analysing where the buyers are coming from,” said Evans.
On the Atlantic Seaboard there were buyers from France, Germany, the UK, Denmark, Switzerland, Iran, the Netherlands, Tanzania and Zimbabwe. The City Bowl attracted buyers from Germany, Angola, France, Portugal, the UK, Italy, the UAE, the US and Benin. False Bay buyers came Germany and the UK. The Southern Suburbs attracted buyers from Zimbabwe, Belgium, New Zealand and the UK.
According to members of the institute, she said, valuers had increasingly been using PropStats’ information to motivate the pricing of properties for bond applications, as the information was current and the prices listed gave an accurate idea of what was happening in the marketplace. The information was captured as sales were made, and then confirmed, rather than waiting a few months for the transfer to go through, she said.
“While more overseas buyers visited Cape Town last year because of its term as World Design Capital for 2014, the knock-on effect will more than likely only be seen in the years to come, just as since the World Cup in 2010. Since then foreign buyer figures have increased steadily, and while many have said the property market wouldn’t be affected by the event, it could be that the exposure to the rest of the world has increased the number of visitors to Cape Town, and tourism increases, so too does property ownership,” said Evans.