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An unexpected uptick in foreign buyers in Johannesburg's swankiest suburbs
Category Property News
Global economic uncertainty wrought by the COVID-19 pandemic has seen an unexpected but extremely welcome spin-off for the local property market; foreign buyers taking advantage of their strong buying power to invest in fixed assets in the form of luxury real estate in Gauteng and further afield.
According to Lew Geffen, Chairman of Lew Geffen Sotheby's International Realty, real estate has always been perceived as a safe harbour for investors in turbulent times and current recessionary conditions across the world now, are no different.
"It's the one good thing to come out of this at the moment; investors globally are looking to make their money go further safely, and they're finding further exchange discounting in the luxury end of the local market right now - up to 8% less than they'd have paid a month ago.
"Sellers are also being more realistic in reviewing offers, especially in the upmarket areas like Houghton, Sandhurst, Hyde Park, Morningside and Bryanston where we have seen very little activity for the best part of two years.
"A number of sales have already been concluded digitally by agents in these areas and most properties were bought physical sight unseen by buyers hailing mainly from Africa, UK, Canada and Germany with a preference for traditional freehold homes on large grounds.
"These sales highlight two critical factors: the importance of an international affiliation and the increasingly essential role that digital technology now plays in the industry.
"Local properties priced above R3 million are all advertised on the international website which widens the reach exponentially and all our virtual tours are of exceptional quality which allows people to view homes in as much clarity as if they were physically there."
With international stock markets beginning to teeter, and the exchange rate in their favour, Geffen expects the trend to continue as investors scramble to prevent major losses.
'Not only are property prices lower than they have been in many years, people are getting zero return on money in banks overseas, so savvy investors are putting their money to work in markets where they'll get bang for their buck."
"Ironically, one of the best bets right now is investment in South African property, and what was a good deal before from a foreign investment perspective is an even more enticing prospect now with the further discount Dollar to Rand.
Chris Cilliers, CEO and Co-Principal in the Winelands, which has always been a popular destination for foreign buyers, says that although they have not concluded any deals since lockdown began in South Africa, they saw an increase in foreign enquiries in the period leading up to it.
"We have a number of very interested buyers who are planning to come out to view the properties they found online once the travel ban is lifted and others are still taking time to browse online and we expect to hear from them sooner rather than later.
"These range from people looking to move permanently to South Africa, swallows looking to spend the summer here and purchasers of large commercial farms and they are all keenly aware that with the current pricing and exchange rate, it's the perfect storm for acquiring property here."
Cilliers says that recent enquiries have come from buyers all over Europe, with the lion's share being German, Belgian, Dutch, French, Scandinavian and Swiss.
In Cape Town, secure estate homes are also attracting interest, according to Dave Burger, Secure Estate Specialist for the group in Constantiaberg.
"I know that a property at Steenberg Golf Estate has just been sold to a Dutch couple who enjoy summers in the Cape and I am currently in touch with a British buyer who is very keen on buying an estate home in the area.
"The moment there is more certainty regarding the future trend of the virus, I expect that we may well see more investment as the interest is certainly there."
Geffen concludes: "As overwhelming as all this is right now, if we work together and see the opportunities as and when they arise, I believe we can come out the other side with a more positive than negative balance.
"The industry will be able to adapt well if all we ensure that we are technologically up to speed with quality digital tours as part of the standard marketing package along with interactive messaging to allow interested buyers to easily interact with agents.
"As Charles Darwin said, it is not the strongest of the species that survives, nor the most intelligent, it is the one that is most able to adapt to change."
Author: Lew Geffen Sotheby's International Realty
