Cape Town - With London and Sydney remaining top spots where South Africans buy properties, locals are missing out on investment opportunities in other fertile markets.
In its latest research report this week, property investment company IP Global lifted the lid on a number of property markets offering good growth and, most importantly, easy access for South Africans.
George Radford, the group’s director for Africa, pointed to European capitals, such as Berlin and Edinburgh, as offering good investment prospects for locals. He said those markets worked for South Africans looking for “offshore investments that generate income in sterling, euros, Australian or US dollars”.
IP Global’s Global Real Estate Outlook report, a quarterly analysis, pointed to Berlin for its large rental market.
“Just 14 percent to 16 percent of the city’s residents are home-owners, making it very much a landlord’s market,” Radford said.
Berlin is Europe’s third-largest city, with “key regeneration projects (that) have reinvigorated previously neglected parts”, he said.
IP Global’s report indicates that “apartment prices rose strongly across 2014, with the average increase hitting 10.1 percent, with rents up 6.6 percent year-on-year”.
The German capital is forecast to have at least 250 000 new residents by 2030, further pushing up the demand for accommodation. Elsewhere in Europe, the group pointed to Dublin in Ireland and Edinburgh in Scotland as good investment choices for South Africans.
Real estate statistics indicate that Dublin has a “shortage of large-scale developments” and that this lack of supply would remain a feature of the market for the foreseeable future.
An “extreme lack of supply” of new housing developments in Edinburgh meant that city would also see growth in property values. On average, Edinburgh’s property prices have climbed 21.5 percent annually, according to IP Global.
Australia has for a while been a country of choice for South Africans who emigrate, with many settling in Sydney. IP Global’s research indicates that Brisbane is another city locals could consider.
It said property prices in Brisbane grew 5.4 percent annually, “among the highest seen in Australia”. This city was also seeing major corporations settling there, which was positively affecting property values. Radford said South African buyers favoured Australia as a “convenient and familiar destination for investment”.
IP Global said other reasons for South Africans investing in overseas properties included “retirement and succession planning, children studying abroad, as well as potentially creating the option for relocation in the future”.
Last year, the company found 90 percent of its local clients invested in the UK and the rest in Australia.
“The UK, particularly London, remains a leading global property investment market,
“South Africans also have historic links with the UK, which makes it even more compelling for property investment,” it said.
Weekend Argus