Amazing Facts About South Africa’s Real Estate Market
When you imagine Africa, pictures of lions, zebras and other wild animals immediately come to mind. Actually, the continent is fast evolving and there is hardly a chance you will find wild animals wandering in the streets these days. African countries are even some of the fastest growing economies in 2018, with Ethiopia being the top 5 globally.
Aside from economic expansion, African countries also have some of the highest high population growths, leading to a huge demand for housing and retail space. This puts Africa up there as one of the most popular hotspots for property investment.
Here are some of the more surprising facts concerning the continent’s bustling real estate market:
Most developers are not Africans.
Foreign investment is dominating the real estate market in Africa, where investors are usually either Asians, Russians or Middle Easterners. Two key factors behind the appeal are a growing tourist industry and favorable exchange rates. Large hotel groups keep expanding their African portfolios, although tourism is not their sole attraction.
Housing is generally cheap.
High-end homes are affordable to only a few Africans. This is why luxury properties in the continent are mostly owned by foreigners. If you’re aiming for a long-term investment, affordable housing is probably risky business. Selling a single luxury villa can earn you more than several low-cost homes. For one, you need to find a local bank that will grant mortgages to low-income buyers.
Even if prices went down to $10-20,000 for a simple modern unit, most Africans will still find unattainable. But there remains a desperate need for this type of home all over Africa. However, if you want to uplift others’ lives as part of your mission as a developer, then there is great reward in going this direction.
Nigeria is booming.
After suffering the most catastrophic recession in more than two decades, Nigeria is establishing a reputation for its rapidly growing technology and agriculture sectors. Even Facebook and Google are planning to base their African headquarters in Lagos.
The real estate industry in South Africa is already up there.
South Africa may be dealing with ongoing corruption issues, but that hasn’t stopped it from being a famous investment hub. The rand stays weak against global currencies and the cost of living is significantly low. Cheap housing is the norm, and tourism is growing. International investors are constantly putting money into the areas of recreation and accommodation.
Sometimes, things turn complicated.
Africa is far from a simple continent, what with its entire range of cultures and nationalities, where you will find property laws just as diverse as its people. A 50% deposit is often required when you buy land. In certain countries, such as Mozambique, only the government can own land. In any case, spend time doing some research so you can learn more before investing in African real estate.
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