Signs of renewed expat, foreigner interest in SA housing market
Cape Town - Due to improved sentiment about South Africa, it would not be surprising to see an increasing demand for SA residential property among foreigners and SA expats, according to John Loos, household and property sector strategist at First National Bank.
This is despite demand levels for SA domestic property from foreigners and SA expats being down significantly compared to 2015 and 2016, according to the FNB Estate Agent Survey for the first quarter of this year.
Estate agents surveyed estimated that 4.3% of total home buying for the two quarters up to and including the first quarter of 2018 was by foreigners.
The survey estimated that the percentage of SA homes being bought by SA expats was 1.51% of homes in the first quarter of 2018, after declining since 2015.
The survey also indicated that the number of buyers from other parts of Africa purchasing residential property in SA has slowed faster than overall foreigner home buying here in recent years. For Loos this could arguably reflect tougher African economic conditions compared to those in more developed countries in recent years.
The estate agents' estimates about a weakening demand among foreigners and SA expats throughout 2017 reflected "dampened investor sentiment" towards SA in general, according to Loos.
In his view, this was likely caused by the stagnation of SA's economy over a number of years, uncertainty about the SA government's future economic policy, and "negative news" about the country such as sovereign rating downgrades to "junk status".
"However, we have started 2018 with a noticeably more positive mood in South Africa, partly due to the political leadership change in the country following the ruling party’s elective conference in December 2017," said Loos.
Positivity has also been reflected in a stronger rand and a rise in the RMB-BER Business Confidence Index in the first quarter of 2018.
"We will wait for further quarterly surveys before concluding that foreigner and expat buying levels are picking up meaningfully or not," said Loos.
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