Owing to the increasing positive local sentiment since the start of 2018, foreign ownership in the local property market has experienced an encouraging upsurge.
This is according to a new report by Lightstone Property, which found that there an increase of 42% in January 2018 in Cape Town alone.
“Gauteng and Cape Town are evidently at the top of the purchasing pile; Cape Town due to its cosmopolitan ambiance and multi-cultural inclusiveness, and Gauteng because of the thriving industrial and business hubs which offer many employment opportunities,” said Hayley Ivins-Downs, head of property at Lightstone.
She added that the transactional data shows that 83% of all foreign purchases are made in these two provinces.
“However, a surprising occurrence is that Gauteng is becoming increasingly popular and the Eastern Cape is also becoming more alluring to foreign buyers,” said Ivins-Downs.
“The current view of the percentage of property transfers in the higher value bands shows that Western Cape is the top performer in the country, followed by Gauteng,” she said.
“The R3 million to R4 million property value band in Gauteng has experienced a growth of 39% but a significant decrease in the above R4 million value band.”
“The Western Cape in comparison has enjoyed the most growth in the R4 million value band and a negative growth in the R3 million to R4 million band. Growth and popularity in the R2 million to R3 million value bands remains high for both provinces.”
According to Ivins-Downs the upper value band in the Western Cape will continue to grow in popularity.
Taking a closer look at transactional data within the provinces, Cape Town and Milnerton in the Western Cape; and Sandton and Johannesburg in Gauteng are the highest growth areas, Lightstone found.
“Historically, Lonehill, Sandton – which used to be a very popular choice amongst foreign investors – has declined somewhat. Parkmore has now become very popular, and surprisingly Douglasdale has also shown an increase since 2016,” said Ivins-Downs.
“Looking at Greater Johannesburg, Gauteng the foreign transaction growth in Parkhurst weakened, while Northcliff has become a very popular choice. Glenvista is shown to have increased in interest since 2015.”
Cape Town suburbs
In the Western Cape, Cape Town foreign interest is far wider spread geographically.
“The growth in Sea Point which has been very popular over the last five years has declined, while Rondebosch has doubled in volume and Observatory, where new developments has tripled has become very popular. Kenilworth has also shown an increase in foreign investments since 2016,” said Ivins-Downs
“In Milnerton in the Western Cape, foreign transactions have grown in Century City. Table View continues to be a popular choice as it has in previous years.”