By Marc Morley-Freer, Head of Private Client Business at Smart Currency Exchange
Will the continued Rand [ZAR] devaluation trigger renewed interest from overseas buyers in the South African residential property market? In the past year the Rand has weakened by over 13% and is now at its highest against Sterling since January 2009 giving the overseas property purchaser more buying power and making owning a holiday home in South Africa a reality.
It seems as though Brits looking for their dream holiday home are searching for even more ‘value for money’ and looking slightly further afield from the usual trappings of Cape Town. It’s no surprise, when you consider that if you travel for as little as 30 minutes towards the coast or Noordhoek, similar properties are almost half the price than in the capital.
Having been through a considerable housing boom from 2000 through to 2006, house prices grew by circa 20% year on year. It was inevitable that prices would soften, and soften they have - in 2008 through to 2011 in real terms, each year saw a decline.
With property prices now stabilised, 2012 showing a modest increase and non South African residents finding it pretty easy to buy, it could be a good time to pick up a well-priced property. As with every property transaction be sure to research and do your homework. A weak currency shouldn’t be the tipping point for taking the plunge, but it certainly helps when paying the bills.
Closer to home, it seems as though the fiscal woes of Cyprus may have been forgotten - at least by Far East investors - as a recent delegation from the Hong Kong Conglomerate ‘China Glory National investment’ pledged to invest over one-and-a-half—billion euros into the Cyprus property market. News reported earlier this month, stated that the delegation had already made an investment in Venus Rock Golf Resort near Paphos for a sum of €290m before pledging a further billion euros on additional infrastructure projects.
As you would expect, President Nicos Anastasiades was elated with the initial and on-going investment saying: ‘The whole investment will reach about one-and-a-half billion euros and instantly have multiple benefits, both with regard to employment on completion of the project and in direct revenue in terms of taxes, direct and indirect’.
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