Amazing Facts About South African Real Estate
When you imagine Africa, pictures of lions, zebras and other wild animals immediately come to mind. In reality, the continent is developing rapidly and you will likely not find these wild animals parading the streets any longer. African countries are even some of the fastest growing economies in 2018, with Ethiopia being the top 5 globally.
Apart from economic progress, populations across African countries have also climbed dramatically in the last few years, ushering in a huge housing and commercial space demand. This is the reason Africa is now one of the hottest places when it comes to property investment.
Here are some of the lesser known facts about Africa’s booming real estate industry:
Developers are not always 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. International hotel groups are relentlessly expanding their African portfolios but tourism is just one of the attractions.
Housing is generally cheap.
Only a handful of Africans can afford upmarket homes. This is why foreigners are the more common owners of luxury properties in the continent. If you’re thinking of a long-term investment, cheap housing may be too risky. You may pocket a bigger profit after selling one luxury villa than many low-cost properties. You have look for local mortgage providers for low-income households for one.
Even if a simple urban unit cost as low as $10-20,000, it would be pipe dream for most local folks. 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.
Nigeria has emerged from the world’s most devastating recession in more than 20 years, and it is now drawing international interest for its two rapidly expanding sectors: technology and agriculture. Even Facebook and Google are planning to base their African headquarters in Lagos.
South African real estate is on top.
Even with South Africa’s seemingly endless corruption problems, it remains a an attractive investment hub. Cost of living is highly affordable, while the rand stays weak against most foreign currencies. Cheap housing is the norm, and tourism is growing. Global investors keep to investing in the accommodation and recreation industries.
It does get 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. When buying land, you usually have to pay a 50% deposit. In Mozambique and some other countries, private citizens cannot own land; only the government can. In any case, prior to investing in Africa’s real estate industry, make sure you do you research and learn more about it.