Foreign buyers keep faith in SA property
Category Market News
Foreign buyers keep faith in SA property
And they are getting younger
Foreign buyers accounted for just 3% of total transfer volumes in 2021, but paid on average 50% more for their properties than their South African counterparts.
Lightstone tracks foreign buyers by ID number, but is unable to identify the country of origin of the foreign buyer.
The percentage of foreign transfers has been at 3% since 2019, after nine years at 2%.
Interestingly, as the table below indicates, the percentage of bonded foreign transfers has been rising steadily over the 12 years under review, from a low of 42% in 2011 and 2013 to a high of 62% in 2020. The percentage dropped to 60% in 2021.
In terms of the value of transfers, when last we reported on this in 2014, foreign transfers averaged at R1 174 829 as compared to R1 513 926 in 2021. The South African averages were R647 281 in 2014 and R1 005 950 in 2021.
Where are foreigners buying?
Foreign purchases are highest in Gauteng, followed by the Western Cape and KwaZulu-Natal.
In 2021, foreigners bought 5 039 properties in Gauteng, compared to 2 308 in the Western Cape, 762 in KZN and 446 in the Eastern Cape.
Preferred cities and towns
Johannesburg is the first choice for foreign property purchases in 2021, as it was in 2016. Sandton remains second in both years and in 2021, Pretoria nudged Cape Town to fourth spot. That means three out of the four top choices come from Gauteng.
The towns in fifth to ninth position have remained constant from 2016 to 2021. Randburg (Gauteng) is fifth, Milnerton (WC) is sixth, followed by Midrand (seventh), Roodepoort (eighth) and Centurion (nineth) - all in Gauteng. Germiston came in at tenth spot in 2021, displacing Port Elizabeth (Eastern Cape) from the top ten.
The top 10 towns and top 15 suburbs suggest that foreign leisure buyers are insufficient in number to make the table as none of the popular locations in Cape Town, along the Garden Route or in KwaZulu-Natal appear.
Foreign buyers have been getting younger
The profile of foreign buyers has changed over the past twelve years.
While the 65+ age group has dropped from 19% in 2010 to 13% in 2021, it is the 50-64 age group which has dropped significantly, from 38% in 2010 to just 19% in 2021. While the 50+ age group has shown diminished appetite for South African property, the 36- 49 age group has increased from 29% in 2010 to 48% in 2021, while the 18-35 age group has increased from 14% to 20% over the same period.
Author: Lightstone
