According to Absa Group, South African house prices rising at their fastest pace in 20 months in December left prices at the end of the year just 0.2% lower than at the start of the year.
That is not too impressive on its own; UK house prices rose 6.2% in 2009 according to Nationwide, and South Africa is meant to be one of the bright spots of this housing crash. It is; because in 2008, when UK and American house prices fell between 10 and 20%, South African house prices rose 4.1%. That means that South African house prices have risen 3.9% during the worst two years global property has ever seen.
â€œThe residential property market is expected to further gradually improve in 2010 on the back of better economic conditions, the lagged effect of lower interest rates and less tight credit conditions,â€ Absa said.
South Africa is currently the hot market; the market that everyone (overseas property agents that is) wants to feature property for sale in, but very few can.
This is because foreign demand is a fairly new phenomenon for South African property. As a tourism destination it has gotten very popular over the last few years, but has always represented too much of the unknown to be considered for second homes or investment.
Now, South Africa’s current popularity with overseas property buyers could simply be because it is hosting the World Cup this year, and because it has proven itself a stable market capable of surviving a massive global recession. But there are other factors at play:
There is the length of research that buyers are doing on their own behalf before entering into a property purchase has levelled the risk playing field; extensive research minimises the risk of a property purchase, so that no destination is any more risky than any other — within reason.
Then there is the proven growth and stability of the other African states, namely Morocco, Tunisia and Egypt. All of those have seen strong economic growth throughout the international crisis, making Africa’s nations of peace an economic force to be reckoned with.
The lack of restrictions on foreign ownership is certainly not a hindrance either, as Global Property Guide says: “foreigners can own immovable property in South Africa without restriction. However, all foreign funds remitted to the country must be declared and documented to ensure repatriation. The property must also be endorsed â€˜non-residentâ€™ as a condition for repatriation.”
Of course no one really knows why South Africa is a rising star in the world of overseas property. We just know that it is, and probably will be for some time to come.
Photo credits: Derek Keats via Flickr