Share

Foreigners cool on Cape properties

Johannesburg - The number of foreigners who bought properties in the Western Cape dropped last year compared to previous years, according to the 2010 FNB Estate Agent Survey released on Monday.

The estimated percentage of foreign buyers in the city of Cape Town was 3.5% of total buying for the fourth quarter, and an average of 4.75% for the year.

This was significantly down from the estimated 10.75% average for 2008 and 7.75% in 2009.

"The absolute amount of foreign buyers may not have declined as much as the percentages suggest, because the market was thinner in 2008 than in 2010. But that magnitude of decline in percentage would suggest some sort of absolute decline in foreign buying in our region," said the report.

It said that a reason for a decline in foreign buyers may have been an overall increase in foreign investor interest in SA.

"By this we are referring to the well-documented recent surge in portfolio 'yield-seeking' investment by foreigners in South African bonds as well as equities, which in turn caused the rand to strengthen significantly against some of the world's major currencies," the survey said.

In rand terms, the average house price in the Western Cape was estimated to have risen by 10.2% from the 2009 average, while in dollar terms the average increase was a much more substantial 25.3%. In euro terms it was far higher at 32.4%.

"At that sort of rate of price growth, it is hardly surprising that we see agents reporting a foreign buying drop-off. I would contend that the decline has little to do with any rise in negative sentiment towards our country or our region, but more to do with an affordability issue, driven by an increase in investor interest in other South African asset classes," said Clinton Martle, Western Cape regional sales manager for FNB home loans.

An aspect of the survey that showed improvement was that of black buyers.

Agents claimed that buying by black homeowners had risen from 11% in 2009 to 25.5% in 2010.

While this number can be erratic, it represented the highest percentage of black buying since the start of this survey question in 2005.
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.5%
Rand - Pound
23.95
-0.2%
Rand - Euro
20.50
-0.2%
Rand - Aus dollar
12.35
+0.0%
Rand - Yen
0.13
-0.5%
Platinum
895.30
-0.2%
Palladium
991.47
-1.0%
Gold
2,193.25
-0.1%
Silver
24.44
-0.8%
Brent Crude
86.09
-0.2%
Top 40
67,836
+0.2%
All Share
74,046
+0.2%
Resource 10
56,127
+0.8%
Industrial 25
103,468
+0.2%
Financial 15
16,484
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders