< Disclaimer> < Return To Issue Article Index >

Property has long been considered the ultimate investment class, whether primary residence, income opportunity, retirement security or your very own vacation destination. Owning a ‘piece of dirt’ has always been humankind’s interpretation of self. However and wherever it is used as a source of personal security, the fundamentals of sound property investment always comprise location and value.  In a world theatre which has seen the opening up of communications through technology, through to the current uncertainty spurred on by war, these fundamentals are no less of importance today than they were in times past.

There was, however, a time when South Africa was considered unsavoury as a destination – crime statistics, lack of investment incentives, tight exchange control regulations, poor economic stability and uncertain socio-political dynamics contributed to a resistance to direct foreign investment.

These times have changed; South Africa now enjoys a remarkable growth in tourism, has developed its’ macro-economic policies to suit world standards, has seen a dramatic reversal in crime and political favour – many tourists visiting the country have returned as immigrants or as investors.

Exchange rates lean heavily in favour of many foreign nations, yet has the added advantage of ideal export conditions.

Cape Town is probably the most favoured coastal tourist destination, providing visitors with a continental feel in Africa…host to a myriad of nationalities, Cape Town is known as the ‘Mother City’, the birthplace of South Africa as we know it today.

Johannesburg is the destination of choice for business people the world over. The financial capital of Africa, Johannesburg’s bustling, landlocked lifestyle is comparable to London or New York albeit on a smaller scale.
.
The Kruger National Park, amongst others, is favoured by those in search of a more time honoured African vacation destination…an area almost the size of England and ensuring an environmental legacy for generations to come, it embodies the very essence of Africa.

Property investment in SA is enabled through a number of means. Direct, indirect and shared ownership.

Direct investment in property by foreign nationals is welcomed and once again, the R/$ exchange rate weighs heavily in favour of those investors seeking to acquire secure assets in good locations, with good growth prospects and real property value.

Indirect investment into property is usually through a Property Loan Stock or Property Unit Trust (the equivalents of a REIT) listed on the Johannesburg Stock Exchange. These forms of investment are subject to movement in the equities markets but provide investors with a liquid, spread risk in property.

Shared ownership is usually in the form of syndication or shareblock structures, enabling smaller investment in a direct property.

With Reserve Bank approval, any potential property investor would be assisted by a professional team encompassing exchange control and taxation advice, legal and corporeal advisors, as well as structured finance and mortgage finance facilitators.

Rand yields on direct property vary between 10% and 18%, with prime lending rate at 11%. The combined capital growth and income/interest from indirect property has consistently outperformed the JSE’s All Share Index.

With global markets experiencing ‘the jitters’, it may be time to reassess your choice of investment location, take advantage of a sound and growing economic environment and enjoy a friendly, beautiful South Africa.

To contact Daryl Click Here
..

< Send a Letter to the Editor > < Subscribe> < Submit An Article >< Disclaimer>