Millionaire foreigners are buying up in parts of South Africa – here’s why

 ·30 May 2024

Property experts have highlighted a major increase in foreigners buying up property in Cape Town, with some noting as much as 32% of sales going to international buyers in some areas in the first quarter of 2024.

According to real estate agents, the luxury property market in Cape Town is poised for a record-breaking year, with demand fueled by international buyers and ‘semigrators’ from other provinces.

Lightstone’s data shows that the majority of transaction volumes over the quarter took place in Cape Town, with sales amounting to almost R800 million, mostly in the Atlantic Seaboard and City Bowl suburbs and the Southern Suburbs.

The managing director of DG Properties, Alexa Horne, stated that she completed over R150 million in sales within just four weeks in Bishopscourt. Significant sales were also made in nearby areas of Upper Constantia.

She also mentioned that properties in areas such as Higgovale, Sea Point, and the V&A Waterfront, as well as smaller luxury apartments and mixed-use developments near the fringes of the CBD, are attracting great interest.

Lew Geffen Sotheby’s International Realty and Seeff Property Group have noted a similar trend.

The managing director of Lew Geffen Sotheby’s International Realty, Andre Coetzee, stated that many people purchase properties in South Africa to avoid the European winter and typically stay in the country for three to six months annually.

He added that there is a sizable and expanding community of German, Swiss, and Dutch individuals in Somerset West, and they tend to favour properties in gated estates within the price range of R4 million to R12 million.

To add to this, European millionaires are still scooping up homes that exceed well over R20 million.

Ross Levin, a licensee for Seeff Atlantic Seaboard and City Bowl, noted that 32% of Seeff’s luxury sales were made to international buyers, including:

  • Three German buyers at R20 million, R23 million, and R24.5 million,
  • Two Swiss buyers at R20 million and R21 million, and
  • Individual buyers from the UK (R38 million), Netherlands (R37 million), Belgium (R25 million), and USA (R25 million).

The areas with the highest volume of sales exceeding R20 million were Clifton, Camps Bay, Constantia, and Bishopscourt.

Horne also highlighted that the favourable currency for foreigners, as well as the unmatched value-for-money lifestyle on offer, continues to attract international buyers from the UAE, UK, Europe, and even other African countries.

Even the minister of Home Affairs noticed this trend as early as July last year, with the department highlighting the top five retiree feeder countries—the UK, China, Germany, the USA, and Bangladesh—accounting for 1,824 out of the total 3,645 visa applications.

Why they’re choosing South Africa

Despite the many challenges in South Africa, such as load shedding, high crime rates, and poor governance, it is still considered a very attractive retirement destination for foreigners—especially the Western Cape.

One of the main reasons why these immigrants choose South Africa as their retirement destination is because their euros and dollars afford them a better lifestyle and a cheaper cost of living.

Other reasons include the warm climate, picturesque landscapes, and beautiful beaches, which provide an attractive living environment for retirees.

According to economist Dawie Roodt, the growing trend of foreign retirees choosing South Africa is a promising development for the country’s economy.

Roodt explained that these retirees essentially serve as long-term visitors, contributing to an influx of capital and supporting the rand’s exchange rate.

Additionally, Roodt underscored the importance of South Africa encouraging more of these types of visas.

Roodt added that South Africa should encourage more of these types of visas.

Read: The houses you can afford on the average salary in South Africa

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