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Expats retreating from Cape Town real estate market
| Published: | 8 Feb at 6 PM |
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Tagged: Property Abroad, South Africa
The purchase of real estate in Cape Town by expats and foreign investors is slowing down, with some believing the city’s unusual drought conditions are responsible.
Formerly a popular choice for expats and investors from overseas, Cape Town and its surroundings are now a no-go area as regards property purchase. The cooling of interest over the past two years is now being seen in lower prices as a measure to increase still slowing sales figures. Many believe the ongoing drought situation in the Western Cape region is to blame as it’s now causing acute water shortages across the entire city of Cape Town.
Real estate professionals have confirmed an ongoing trend towards the region becoming a no-go area for house-hunting expats and international property investors, with the national estimate of purchases still declining from former highs. Estimated foreign interest declined last year from 8.9 per cent of total sales to just 5.5 per cent, according to property agents’ sales lists. However, property strategists believe the problem isn’t the drought, suggesting the weak sentiment amongst consumers, businesses and the investor community is more likely to represent negative feelings about South Africa itself.
The present-day weakness of the rand, equally weak economic performances and an obvious lack of ongoing policy and direction in the country’s political scene have all contributed to a number of ratings agencies’ downgrading South Africa to ‘junk status’, thus dissuading those looking to purchase property either as a personal residence or as an investment. Purchases of local properties by South African expats living overseas have also fallen, but a more positive mood since the turn of the year is expected to result in improved economic performance overall.
Formerly a popular choice for expats and investors from overseas, Cape Town and its surroundings are now a no-go area as regards property purchase. The cooling of interest over the past two years is now being seen in lower prices as a measure to increase still slowing sales figures. Many believe the ongoing drought situation in the Western Cape region is to blame as it’s now causing acute water shortages across the entire city of Cape Town.
Real estate professionals have confirmed an ongoing trend towards the region becoming a no-go area for house-hunting expats and international property investors, with the national estimate of purchases still declining from former highs. Estimated foreign interest declined last year from 8.9 per cent of total sales to just 5.5 per cent, according to property agents’ sales lists. However, property strategists believe the problem isn’t the drought, suggesting the weak sentiment amongst consumers, businesses and the investor community is more likely to represent negative feelings about South Africa itself.
The present-day weakness of the rand, equally weak economic performances and an obvious lack of ongoing policy and direction in the country’s political scene have all contributed to a number of ratings agencies’ downgrading South Africa to ‘junk status’, thus dissuading those looking to purchase property either as a personal residence or as an investment. Purchases of local properties by South African expats living overseas have also fallen, but a more positive mood since the turn of the year is expected to result in improved economic performance overall.
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