Foreign investment in South African real estate
Category Industry News
Is foreign investment into the South African property market a good bet?
Foreigners can purchase property in South Africa, with some limits, and with the strength of the Rand still waning against many global currencies, buyers from abroad will certainly be making a good investment.
In terms of property costs, it's a no-brainer for somebody from abroad to enter the Cape Town market, both in terms of overall costs, but also for what they are getting comparatively in other markets.
Cape Town boasts incredible lifestyle options and is one of the most globally connected cities in the world, both in terms of communications and people, and in comparison to cities like New York, Paris, Monaco and London, you will be getting a lot more for your money.
Latest reports* on the luxury residential market back this up further, with Cape Town ranking favourably against other luxury residential markets around the globe. Looking at the number of square metres of prime property $1 million (around R14.5 million) can buy you around the globe, the report reveals that while in some cities, it wouldn't so much as buy you a box room, in Cape Town it would allow you to live a life of luxury.
In the city comparison, CPT offers buyers fantastic value for money, with $1 million getting you a 202 square-metre property (on average), compared to the likes of New York (34), London (31), Paris (42) or Monaco (15). Add the lifestyle elements of Cape Town and it's a no-brainer as to why investment in local property is a good idea.
With remote work the model of the future, why work from home, when you could work from Cape Town... in a spacious, luxury home?
So what does a foreign investor need to consider when wanting to invest on the South African property market?
Visa Requirements
If you intend to stay in the property, you will need to apply for a visa, dependent on your country of origin and length of stay.
How to enter into the agreement
If you're not in the country to sign the transfer or bond documents, you can sign them at the Notary Public, or later at the South African embassy.
Mortgage rates for foreigners?
Major banks will offer mortgages to foreign buyers under certain conditions. Non-residents may arrange finance for up to 50% of the purchase value, with the balance coming from foreign funds transferred to South Africa.
Will my deposit be safe?
Yes. It will be held in an interest-bearing trust account where it will earn interest until the transfer of ownership goes through. The conveyancing attorney or estate agent will charge an administration fee, which is generally deducted from the interest earned and not the capital investment.
What you need:
Passport
- SARB certificate showing loan eligibility
- Documents showing proof of good credit ie international credit check / bank statements
- Documents proving you can afford mortgage ie. bank statements / utility bill
For more information, get in touch with one of our Trusted Property Advisors today!
View some of our latest luxury listings here.
Author: The Agency Property Group
