The South African property market

From country houses to beachfront apartments, anyone thinking of moving to South Africa will not be disappointed by some of the opportunities available, with a wide range of homes to suit all tastes and budgets.

South Africa offers good real estate standards, while properties are regarded as some of the finest in the world. Houses and apartments here are generally more spacious than those found elsewhere in the world including most major destinations in Europe, the USA and Asia. What’s more, many of the country’s architects and interior designers offer world-class designs and luxury finishes to rival high-end homes found in other parts of the globe.

“There are some stunning properties on offer,” says Ian Slot, managing director, Seeff Atlantic Seaboard. “South Africa is a land of opportunity for foreign property buyers and investors. It offers world-class property options.”

Blessed with an array of stunning beaches, amazing wildlife and game parks, incredible scenery, a warm climate, affordable properties and low cost of living, it is not surprising that there are well over 200,000 UK expats now living in South Africa.

Slot continues: “The country is regarded as one of the top tourist destinations in the world, boasting unparalleled scenic beauty, a smorgasbord of leisure activities, top international hotels and accommodation establishments, restaurants and leisure facilities.”

Although it is essentially a developing economy, South Africa features a wide range of world-class infrastructure and facilities with well-developed cities and towns including excellent road networks, transport, medical facilities, telecommunications and web access. There are also a number of international airports located in the major inland and coastal cities that offer direct access from just about any destination in the world.

South Africa is widely regarded as the gateway to Africa and provides access to one of the biggest developing markets on the globe. The country also plays a leading role on the continent including its participation in the African Union.

The country also has one of the most progressive constitutions in the world that includes protection of people’s and property rights amongst others. Political stability and economic freedom still prevails. It has one of the most advanced banking systems in Africa and strong fiscal policy, driven by the Ministry of Finance and South African Reserve Bank, has seen it weather the global economic crisis. It also remains easy to do business here.

Slot comments: “Most countries around the world have some sort of restriction on foreign ownership of property or land and South Africa is currently one of only 10 countries worldwide which does not. The legislative landscape provides strong protection of land rights, embodied in the property laws of the country. South Africa has a world-respected registered title system with records and historical data that date back to the early settlement of the country.”

South African property prices are still amongst the lowest prices in the world, even in primary coastal markets thus offering outstanding value to buyers and investors.

“Regardless of where you choose to own property, the country offers one of the best lifestyles in the world. The warm climate, magnificent beaches, excellent views and low cost of living are all reasons that continue to attract visitors, buyers and investors to South Africa,” slot concluded.

Choosing a location

South Africa is divided into nine provinces:

• Eastern Cape, Northern Cape and Western Cape in the west and south
• Free State in the central region
• Limpopo and North West in the north and northwest
• KwaZulu-Natal in the eastern region
• Gauteng and Mpumalanga in the northeast

Cape Town is where most British expats settle, with a number of differing neighbourhoods, including the Atlantic Seaboard and Constantia, appealing to house-hunters.

There are many gated communities offering good value for money homes in and around the Eastern Cape that also appeal to Brits.

Alternatively, you may wish to head north along the coast to KwaZulu-Natal, especially the Lower South Coast part of the area, to find more attractively priced homes offering easy access to a range of golf courses and stunning beaches, among other popular amenities.

Buying costs

When buying property in South Africa, there are various expenses that you need to take in to consideration, aside from the actual purchase price, in order to cover costs. These can include some/all of the following:

• The bank’s arrangement fee for a mortgage is typically 1% to 2% of the loan amount
• Some banks charge a non-refundable mortgage application fee of about £100
• The valuation fee will vary according to the purchase price
• Legal fees generally equate to around 1% of the purchase price
• Transfer Duty of 0-8%
• Lawyer’s fee for conveyance is about ZAR1,500
• Registration fee: ZAR70 – ZAR1,250
• Taxes – If you secure a South African mortgage, a further cost will be charged for property transfer taxes; this will be 5% to 8% of the purchase price
• Buildings insurance is payable to provide basic cover for the duration of the mortgage

Continue to section 2: Legal matters