A recent report on South Africa's property market is raising concerns amount #propertyinvestors regarding the viability of RSA as a location for investment. It may be the case that money previously destined for the market in Cape Town, Johannesburg/Sandton and Stellenbosch may now be heading to other markets, overseas, or being held onto.
One of the biggest red flags is the slowdown in economic growth. South Africa has been struggling with a sluggish economy for some time, and this is having a negative impact on trust in the local property market. But also, a highly imbalanced skew of sales towards on part of the country is causing problems for local property investors.
While last year the South African #realestate market was buoyed by international investment with foreign investors responsible for 30% of all sales in the Cape via the Atlantic Seaboard one property expect noted; 'The absence of sales exceeding R50 million in Clifton and the Waterfront is concerning, considering it was a historic year for the sector and these areas are highly sought-after prime locations.'
Large-scale sales greater than R20m+ (941k GBP, 1.13m USD) have all but disappeared in the Johannesburg with [7] sales of this size comparative to [120] in Cape Town and
Another red flag is the upper-end of the price ceiling for #SouthAfrica has barely moved in the last [8] years to 2015. And this means that investors looking for capital appreciation at the top end of the South African market will need to look elsewhere.
Any wealthy buyers may already be off-shoring their capital, however this may open doors for buy-and-hold investors who do their research. Low buying at the top end may provide opportunities for high-end rental investors, and could create a leverage point for this level of rental investment, if deals can be found.
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