Property markets lure South Africans to Europe, Australia
Written by Yazeed Kamaldien
With London and Sydney remaining top spots where South Africans buy overseas properties, locals are missing out on investment opportunities in other fertile markets.
Property investment company IP Global revealed in its latest research report this week a number of property markets with growth and easy access to South Africans.
George Radford, the group’s director for Africa, pointed to European capitals including Berlin and Edinburg as investment prospects.
He said these markets worked for locals looking for “offshore investments that generate income in Sterling, Euros, Australian or US Dollars”.
IP Global’s Global Real Estate Outlook report – a quarterly analysis – pointed to Berlin for its large rental market.
“Just 14% to 16% of the city’s residents are home owners, making it very much a landlord’s market,” said Radford.
Berlin is Europe’s third-largest city with “key regeneration projects (that) have reinvigorated previously neglected parts”.
IP Global’s report indicates “apartment prices rose strongly across 2014, with the average increase hitting 10.1%, with rents up 6.6% year-on-year”.
Berlin is estimated to have at least 250,000 new residents by 2030, pushing up the demand for accommodation.
Elsewhere in Europe, the group pointed to Dublin in Ireland and Edinburgh in Scotland.
Real estate statistics indicate Dublin has a “shortage of large-scale developments on the horizon this lack of supply will remain a feature of the market for the foreseeable future”.
An “extreme lack of supply” of new housing developments in Edinburg meant it too would see growth in property value.
On average, Edinburg’s property prices have climbed 21.5% annually, said IP Global.
Australia has for a while been a country where South Africans have emigrated too, with many settling in Sydney. IP Global’s research indicates Brisbane, also in Australian, would be another city locals could consider.
It said property prices in Brisbane grew 5.4% annually, “among the highest seen in Australia”. This city was also seeing major corporations settling there, affecting property values positively.
Radford said South African property buyers favoured Australia as a “convenient and familiar destination for investment”.
IP Global said other reasons for South Africans investing in overseas properties included “retirement and succession planning, children studying abroad, as well as potentially creating the option for relocation in the future”.
In 2014, the company found 90% of its local clients “invested in the UK and the rest invested in Australia”.
“The UK, particularly London, remains a leading global property investment market,” it said.
“South Africans also have historic links with the UK, which makes it even more compelling for property investment.”