Amazing Facts About South Africa’s Real Estate Market
When thinking of Africa, you automatically imagine lions, elephants, zebras and other wildlife. In reality, the continent is developing rapidly and you will likely not find these wild animals parading the streets any longer. African countries are among of the quickest growing economies of 2018, with Ethiopia sitting at the number 5 position – 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 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 usually non-African.
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. Big hotel groups are always expanding their African portfolios, though other attractions outside tourism are also in the mix.
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. Yet all throughout Africa, there remains a tremendous need for such type of dwelling. However, if you’re a developer who wants to do business while uplifting the lives of others, this is a good way to go.
Nigeria is rising.
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 Google and Facebook have announced their plans to build their African headquarters in Lagos.
The real estate industry in South Africa is already up there.
Even with South Africa’s seemingly endless corruption problems, it remains a an attractive investment hub. The cost of living is low and the rand remains weak against most world currencies. Cheap housing is accessible all throughout, and its tourism sector is the best it has ever been. Investors worldwide keep pumping investment into the recreation and accommodation sectors.
Sometimes, things turn complicated.
With its colorful array of cultures and nationalities, Africa is exactly what you would call a complicated continent, where Property laws are as diverse as the population. 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, spend time doing some research so you can learn more before investing in African real estate.