There has recently been a peak in interest from a certain type of international property investor in Cape Town, says Bill Rawson, Chairman of the Rawson Property Group, and this is not the “swallow” buyer that alternates between Germany or the UK and Cape Town in order to maximise their time in warm periods, but rather an international buyer who sees Cape Town’s merits as far too great to overlook and who wants to spend the majority of their days here.
This new type of buyer, says Rawson, is typically coming from the rest of Africa, the Middle East, Russia, Asia and both North and South America.
A recent article in the Wall Street Journal written by Rebecca Weber, he says, outlined a story of an American business man who, after visiting Cape Town, realised just how much the Mother City had to offer when compared to his former Los Angeles lifestyle. He was attracted to the scenery, vineyards, wine scene, restaurants and, particularly, the prices attached to all of these, which were about one third of those he is used to paying.
This type of story, says Rawson, is cropping up more and more. Due to the current weak rand, many foreigners are able to buy in Cape Town at heavily discounted prices. FNB’s House Price Index has shown us that, when comparing mid-2014 to 2010, house prices have reduced by 19,4% in Dollar terms, 21,7% in Euro terms and 25,6% in Pound terms. Any savvy business person realises that a Dollar saved is a Dollar earned — and by moving to Cape Town they are in essence multiplying their wealth by the difference in prices.
In the first half of 2014, he says, foreign buyers represented 7,5% of sales in Cape Town according to FNB’s House Price Index and this figure rises dramatically in areas which have a particular allure to foreign buyers — the Atlantic Seaboard, certain areas around the CBD, such as Higgovale, Steenberg Golf Estate and Constantia to name a few.
17% of the beachfront cliffs of Camps Bay are owned by foreigners, according to the Institute of Estate Agents of South Africa. In Constantiaberg the total percentage of foreign buyers in the last two months in terms of rand value averaged at 19,15%.
A particularly prominent factor which exposes Cape Town and its relatively discounted prices to foreigners, says Rawson, is its booming film industry. Foreign film makers come to Cape Town to take advantage of its diverse, unique locations, as well as its low production costs, which make it far cheaper to film here rather than in Europe or the United States.
Another factor which may, in the very near future, bring in a huge influx of foreigners to Cape Town, and the rest of Southern Africa, is the recent discovery of gas in Mozambique.
“I believe,” says Rawson, “estate agents working in the more expensive areas that attract these foreign buyers are going to see a gradual and welcome increase in potential buyers. These buyers, who believe they are already getting quite the bargain, are also more likely to pay closer to sellers’ asking prices.”
For further information contact the Rawson Property Group on (021) 658 7100.
