Surprising Awesome Facts About South Africa’s Real Estate Market
When thinking of Africa, you automatically imagine lions, elephants, zebras and other wildlife. But truth is, these days, the continent is quickly developing and it is improbable that you will find any wild creatures in the streets. African countries are even some of 2018’s most successful economies, with Ethiopia at the number 5 spot worldwide.
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 puts Africa up there as one of the most popular hotspots for property investment.
Here are some of the lesser known facts about Africa’s booming real estate industry:
Most developers are not Africans.
Foreign investment is making a tremendous impact on Africa’s real estate industry, most investors being Middle Easterners, Asians, and Russians. Part of the appeal are the continent’s roaring tourism industry and favorable exchange rates. Large hotel groups keep expanding their African portfolios, although tourism is not their sole attraction.
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 thinking of a long-term investment, cheap housing may be too risky. You may pocket a bigger profit after selling one luxury villa than many low-cost properties. For starters, you have to find a local mortgage provider for low-income households.
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 booming.
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 South Africa’s unending corruption problems have not stopped it from becoming a popular investment hub. The rand stays weak against global currencies and the cost of living is significantly low. Low-cost housing is available all over, and the tourism sector is at its best. Global investors keep to investing in the accommodation and recreation industries.
Sometimes, it gets 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 some countries, like Mozambique, the government is the only party allowed to own land. In any case, spend time doing some research so you can learn more before investing in African real estate.