Editors Note: The following content has been provided by Grahame Diedericks and Yael Geffen, Yael is the CEO of Lew Geffen Sotheby’s International Realty– One of the world’s biggest estate agencies.
The advent of the digital age has transformed most industries, including real estate which has seen more change in the past decade than in the previous 50 years, with a number of the key shifts being notably accelerated by the impact of the pandemic in just 18 months.
Globally, Covid-19 precipitated an instant and significant change in home and lifestyle priorities for many people and there has been a universal move to properties that will more easily accommodate the needs of homebound families and also allow one to work from home.
And, in countries like South Africa, where the economic and social repercussions have been more severe, Covid, there has been a spike in emigration and off-shore investment enquiries and the desire to have a firm Plan B in place, such as permanent residency in another country through property investment.
An established agency with an international affiliation that affords them access to a vast global network will offer clients the considerable advantages of established relationships with a worldwide community of professionals and a wide-ranging marketing reach, says Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty.
“South Africans are increasingly looking to diversify their real estate portfolios to include more stable markets and a growing number are considering emigration or want to have Plan B in place and this is where an agency with global reach makes all the difference, especially one that can offer a turnkey solution.
“Most people emigrating have a home to sell in South Africa and will also want to buy property in the country to which they are moving, which is not the easiest process at the best of times, but with travel restrictions it can be a convoluted minefield.
“However, working with only one agency to sell and buy makes it a lot easier and also significantly reduces the risk of costly errors – and minimises the stress factor.”
Grahame Diedericks, Manager Principal in Midrand and International Liaison for the group, says that in addition to America and Europe, the company has also forged close working relationships with their counterparts in countries that are attracting a growing number of South African investors.
“South Africans can get a very respectable bang for their buck as well as foreign residency in countries like Spain, Portugal, Cyprus, Malta and Mauritius, all of which are fast-emerging as leading destinations for property investments that deliver returns.”
Mauritius has become a firm favourite with South Africans who are not only buying property on the island but also moving their families and companies to more tropical climes where an investment of $375 000 or more secures permanent residency.
Diedericks adds: “South Africans have become increasingly aware of the long and short-term financial gains of investing in Mauritius and South Africa now accounts for almost one fifth of foreign direct investment in Mauritius and around 40% of the buyers in property development schemes.”
“However, money is still flowing both ways and, despite South Africa’s political uncertainty and the impact of the pandemic, South African real estate is still very appealing to foreign buyers”, says Geffen, adding that the group’s International Referral intake is at its highest levels since 2019.
Geffen continues: “Real estate has always been perceived as a safe harbour for investors in turbulent times and the current global recessionary conditions and uncertainty precipitated by the pandemic have created the perfect storm for this market, especially in the luxury sector.
“And with international investors looking to make their money go further, they’re finding additional exchange discounting in the luxury end of the local market right now – up to 8% less than they’d have paid just a month ago.
‘Not only are property prices lower than they have been in many years, people are getting zero return on money in banks overseas, so savvy investors are putting their money to work in markets where they’ll get bang for their buck.”
Geffen adds that local sellers are also being more realistic in reviewing offers, especially in the upmarket areas like Houghton, Sandhurst, Morningside and Bishop’s Court where there has been very little activity for the best part of two years.
“A number of sales have already been concluded digitally by agents in these areas and most properties were bought physical sight unseen by buyers hailing mainly from Africa, UK, Canada and Germany with a preference for traditional freehold homes on large grounds.
“There has also been an uptick in foreign interest in Johannesburg’s affluent Neighbourhoods with buyers looking for a base in the central business hub of South Africa.”
“A number of coastal regions remain popular with foreign buyers,” says Diedericks, “with areas like Plettenberg Bay, Durban’s North Coast and the ever-popular Cape Town offering the lifestyle many foreigners are seeking, but at a fraction of the cost of comparable international destinations.”
Geffen concludes: “Our company’s international affiliation and being able to market properties on a globally recognised platform is invaluable in this price band, and many buyers have found their way to us through these channels.
“And whilst COVID has certainly had an impact on incoming investors it has not notably slowed foreign buyer interest, with South Africa having one of the most accessible property markets coupled with a slow price growth environment and favourable exchange rate.”