Amazing Facts About South Africa’s Real Estate Market
When thinking of Africa, you automatically imagine lions, elephants, zebras and other wildlife. Actually, the continent is fast evolving and there is hardly a chance you will find wild animals wandering in the streets these days. African countries are even some of 2018’s most successful economies, with Ethiopia at the number 5 spot worldwide.
Apart from economic progress, populations across African countries have also climbed dramatically in the last few years, ushering in a huge housing and commercial space demand. This puts Africa up there as one of the most popular hotspots for property investment.
Here are some of the less expected facts about the continent’s thriving 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. International hotel groups are relentlessly expanding their African portfolios but tourism is just one of the attractions.
Housing is affordable.
High-end homes are affordable to only a few Africans. This is the reason foreigners usually own luxury properties in the continent. If you intend to make a long-term investment, you might find affordable housing risky. You will likely profit more from selling a single luxury villa than many low-cost homes. For starters, you have to find a local mortgage provider for low-income households.
Even if a simple urban unit cost as low as $10-20,000, it would be pipe dream for most local folks. Yet all throughout Africa, there remains a tremendous need for such type of dwelling. However, if you want to uplift others’ lives as part of your mission as a developer, then there is great reward in going this direction.
Nigeria is rising.
After surviving from the most destructive recession in 25 years, Nigeria is now earning global fame for its fast-expanding agriculture and technology sectors. Facebook and Google themselves have chosen Lagos as the base for their African headquarters.
South African real estate is on top.
Even with South Africa’s seemingly endless corruption problems, it remains a an attractive investment hub. Cost of living is highly affordable, while the rand stays weak against most foreign 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.
Africa is hardly a simple, almost overflowing with nationalities and cultures. When purchasing land, you typically have to pay 50% down. In certain countries, such as Mozambique, only the government can own land. In any case, prior to investing in Africa’s real estate industry, make sure you do you research and learn more about it.