Even though South Africa has entered an era of uncertainty around property, investors are still buying. Proposed amendments to Section 25 of the Constitution have hit front pages more often than any other news but this has not stopped people entering the market, says Minette du Plessis of Just Property’s Investment division.
“Have we seen a decline in sales? Not a chance. Considering who we now know will be impacted by the new property Bill, and how President Ramaphosa says it will be constructed, we believe that the way redistribution will play out will in fact boost the economy and growth.”
As we cycle through the third quarter of the year, what are some of the hottest areas for investment property? Du Plessis says, “Sandton apartments priced from R1,3 million have shown phenomenal peaks in sales. Lephalale has shown growth in sales of properties under R1,3 million, thanks to the area offering corporate letting and a specific product for this market. Cape Town properties under the million rand mark have been selling out in less than a day, and majority of purchasers are cash buyers.”
She points out that properties in the R800 000 to R900 000 band, with a monthly rental income of R7 500, attract investors all over the country, as well as South Africans working abroad. “The banks are being very generous to South Africans working overseas,” she says. “ABSA is offering them up to 95% bonds. In fact all banks are offering great deals in general for 2018.”
So why invest in property in South Africa? “You can still buy property for under the million rand mark, and this is the most active market at the moment – the risks are lower and the rental market is strongest for such properties. This type of investment is still very attractive and promises better potential growth than any vehicle currently offered by a financial institution. Even in tough times of high-interest rates or unpredictable political seasons, investors will still make their annual 8-10% capital and rental growth, if they bought in a busy hub with public transport, schools and malls in close proximity,” Du Plessis predicts.
“If you look back to when your family and friends bought their homes or investments 35 years ago, you will see that property sold for R30 000 then is now worth at least R1,5 million, or even more. Property is a long-term investment, and as such, this historical and ongoing growth will continue beyond our time. Sectors of the population may be uncertain about the future, but we are confident. In fact, that uncertainty plays right into the hands of buyers who get into the market now.”
For more information on Just Property Invest please visit http://www.justinvest.co.za/ or call (021) 872 0028.