Why South Africans are buying property in Mauritius

Seeff properties has published a new report focusing on property markets across the continent of Africa.

The property specialist said that there are a number of investment opportunities on the continent, with Namibia, Botswana and Mauritius all named as standouts.

You can find a breakdown of these county’s property markets, including costs, detailed below.

Mauritius

Theo Pietersen, Seeff’s MD in Mauritius, said that the island country is highly sought-after by local property buyers, some for residency purposes, but increasingly for holiday/second homes, retirement and relocation.

“Mauritius is fast becoming a second home for South Africans and with the recent changes in the Mauritian government’s property investment legislation, it is now a lot easier to invest in residential and commercial property on the island and there is an increased amount of developments available for SA buyers to invest in, both residential and commercial,” he said.

He added that the country now boasts top-class infrastructure including an excellent banking sector, strong economic growth and a favourable investment and tax climate and is regarded as one of the easiest places to do business in.

Pietersen said that property on the island is also regarded as an excellent investment and if you invest early, you can generally benefit from excellent capital growth.

However, there are limited opportunities to invest, especially in prime seafront developments, he said.

Pietersen said that finance is available from both South African banks as well as in Mauritius at interest rates of 7%-9% but with 40% cash deposit requirements.

He added that South Africans tend to invest between MUR 6,500,000 and MUR 20,000,000 which equates to approximately R2,628,000 to R8,100,000.

Namibia

Maria Esterhuysen, MD for Seeff Namibia, said that even though this country offers exciting economic and property market prospects, it is also affected by certain fluctuations.

“Namibia had an unexpected, almost 30%, downturn in the economy since 2016 due to a number of factors such as government debt and expenditure which has influenced spending, the unsustainability in the mining sectors because of product price-related factors and the persistent drought which is influencing the farming sector,” she said.

However, she said that the economy is projected to regain strength and momentum that is expected around 2020/1, with government also driving to promote the tourism sector.

Esterhuysen continues that there are currently only restrictions on the ownership of agricultural land, preventing foreigners from 100% ownership.

No restrictions apply to the residential, commercial and industrial property. Foreigners may also own any businesses in Namibia, she said.

“Government recently held a land reform conference in Windhoek where there were discussions about the possible reclaiming of unutilised agricultural land. This is also related to the fear of food shortages in the coming years and could have a more positive effect than a negative effect.

“The above has not been implemented and is still only speculation at this stage.”

When looking at costs, Esterhuysen said that the Bank of Namibia has changed their policy with regards to mortgage percentages.

“This restriction is based on the purchaser’s bank exposure within Namibia. While the new structure limits investors by means of money gearing to purchase multiple properties it also provides the opportunity for first-time buyers to be able to procure a loan and get a foot in the door,” she said.

“Namibia is currently in a buyer’s market phase as house prices have come down considerably in most areas since 2016.

“The largest volume of sales occur in the low to middle-income markets, typically in the N$800,000 to N$1,500,000 range (R800,000 – R1,500,000).”

Botswana

Now is an opportune time to invest in property in Botswana, said Kim Bekker, Seeff’s MD in Botswana.

“For investment purposes, industrial properties in Botswana probably give the highest return on investment. New developments in the Gaborone New CBD have attracted investors in the commercial market as well as a number of financial institutions, consultants and law firms as owner-occupiers,” she said.

Bekker said that in the residential space, there is still only one Golf Estate with approximately 280 houses in Botswana. Entry level is around the P3 million mark (R4 million), but homes have sold on the secondary market for up to P15 Million (R19.6 million).

“Other popular areas include Central (Extension 9 and 11), Greater Phakalane suburb, Kgale View, Mokolodi, Sentlhane and Notwane. There are also new developments at Setlhoa Village and Block 10 which are close to the airport, Airport Junction and Sebele Malls,” she said.

Read: Demand for 12,000 new homes expected on KZN’s North Coast