Lew Geffen has been in the real estate industry since 1972, is recognised as one of the leading experts in property in South Africa and holds many directorships in associated real estate and allied industries.
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Africa piles into property as SA mulls leasehold law
Author: Lew Geffen Sotheby's International Realty | Published: July 13th, 2012
First National Bank’s property barometer for the second quarter shows African foreign buyers increased from an estimated 8,5% of the total in 2010 to 20% this year WEALTHY people from the rest of Africa are beginning to scale up property purchases in SA — just as the government is considering a proposal that foreigners will be permitted only leasehold rights.
According to First National Bank’s property barometer for the second quarter, released yesterday, African foreign buyers increased from an estimated 8,5% of the total in 2010 to 20% this year.
FNB household and property sector strategist John Loos said foreign citizens from the rest of Africa had become a "more significant" buyer group.
"Given expected global economic developments, I would expect African foreign buying of residential property to become a far more significant percentage than its current 20% in the coming years."
But the Department of Rural Development and Land Reform’s green paper proposed limitations on foreign ownership of land and property, which would lead to a slump in foreign purchases.
Mr Loos said the property market expected a faster growth rate in the individual wealth of sub-Saharan Africans, and SA was, for the foreseeable future, the economic hub of the region to which many would come to visit or work.
"This is a positive factor for foreign residential property purchases," he said. This effect on SA’s residential property market was an improvement for this year to date, compared to last year, Mr Loos said.
Overall, the survey estimated foreign purchases at close to 4% — a far cry from the 20% peak in the third quarter of 2008.
Lew Geffen Sotheby’s International Realty chairman Lew Geffen said that "this time most (foreign buyers) will probably be looking for permanent residences close to business centres rather than holiday homes".
"Most will probably not hail from the countries we traditionally associate most with foreign buyers, such as England and Germany, but rather from South America, Eastern Europe, other African countries and, of course, India and China," he said.
Anne Porter Knight Frank MD Lanice Steward said foreign buyers appreciated the fact that, compared to other African countries, SA’s regulations and taxes were equitable and not too onerous
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