Top real estate property investments in South Africa

Notwithstanding the present economic condition throughout the world, South Africa stands firm in its real estate investment area and according to the study made by the investment experts, the prime real estate property still remains undervalued. With the positive result of the recent elections and the hosting of the 2010 FIFA World Cup, South Africa has always presented a stable economic condition especially the real estate market. When you buy an investment property in South Africa, you first need to consider ‘how much house can I afford” before investing your money. Though the South Africa real estate market seems to have consistent graph, yet there may be risks about the best investment property in South Africa. With the present real estate conditions, experts are of the opinion that there is likely to be rise in the real estate property prices.



Why is there an anticipated rise in the property prices?

As the experts are of the opinion that there will be expected rise in the property prices in South Africa, this has prompted more and more international investors to invest in the South African real estate properties. There are some particular properties that are expected to appreciate in due course of time. These places have invited most investors throughout the globe. Some such places include the Western Cape which is a place that attracts the highest number of tourists in a year and stretches from St. Helena to Durban. The coast line of this place has always been a favorite spot for foreign investors as the atmosphere is serene. The price of this property is low and therefore it attracts real estate investors from all places across the world.

The prime property places are at hand for the investors to invest during the perfect opportunity. With the wine and olive guest farms that are full of dams and spring water from the mountains are the reasons that attract so many real estate investors to the southern tip of Africa.

Potential of the real estate investments to earn income

It is not that the real estate investments in the South Africa do not have the potential to generate enough revenue. Each and every hotspot of the foreign investors has the ability to generate enough amount of revenue, thereby decreasing the economic load on the buyer of the property. The Cape wine exports have been affected suddenly with the economic meltdown increasing the global trend that has resulted from the weakness of the African currency.

Therefore, with such positive reports of the South African real estate market, it is imperative that investors will hover around for investing in this market. It is important for them to consider ‘How much house can I afford” so that they do not invest in something that they cannot bear financially.

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Interest Rates DROP again...

Well good news for those of you that own property in South Africa.
Interest rate cuts have been issued again, with the government and reserve bank trying to decrease the stregnth of the RAND against the DOLLAR.

Rate cut 0.5% = Current Interest Rate = 9%.

LOVELY!!!!

Property Forecast Hangover already started

So my property forecast is simply that it will be 2015 before the World property markets returns to where it was at the peak of the boom in 2007 early 2008. What a hangover!!!


Looking at all the property folks analysis of the US, UK, UAE, Eurozone and Africa markets, well results are fairly sound but when it comes to the hot prediction of the exciting crazy days and world property boom, 2015 may be overly optimistic.

So, even if we are correct and prices recover to their 2007 levels by 2015, there is no guarantee that all the factors, the hype, the buzz and all the sexy property ingredients that led to the amazing level of overseas property transactions in the run up to 2008 will have returned.

So what were the key drivers of the boom:  And will we get rid of the hangover

1. Releasing money from your property, driven by domestic property boom s

2. A liberal mortgage and home loans market and cheap credit - 108% Loan to value...scary

3. Strong currencies relative to currencies in seller destinations i.e Pound versus Rand

4. Fear of loss. Prices were going up so fast, buyers felt that doing nothing was losing them money which further re-inforced the cycle.   Remember the buying of whole floors in apartment blocks in Dubai. Cash was also King, But credit was certainly the Queen.

So the big question is: Will any of these conditions have returned by 2015? Any domestic property boom is unlikely given the upcoming spending cuts, tax rises and inflationary pressures which are bound to push up interest rates in the medium term, strengthen or weaken currencies, US pumping money into the economy, this huge dearth of empty properties, even on the west coast of Namibia - time will tell.

Credit should be easier to come by as the banks balance sheets improve and we see banks scrambling to cut costs at all cost, even to the detriment of their allies the mortgage originators (Look at ABSA) but new regulations from the FSA in UK, The FED in the STATES,  SARB Exchange regulations plus more, look certain to restrict loan-to-value rates and clamp down on these weird toxic home loans (Be careful of the 6% loan in SA) mortgages which will probably negate any improvements in the banking system.

Unfortunately, I believe the banks don't have the balls or the willingness to kick start this side of the business...... they are after all people like you and I who also want to live a normal life...ha!!

The best hope for the worlds property market is a collapse in the value of the euro, exchange control removal in South Africa, the FED to stop pumping newly printed money into an economy that must take a bath, firing of all these bankers and instead of bonus's they should get jail terms but by itself this is unlikely to be sufficient to persuade the worlds masses to start buying anywhere again in the kind of volumes we saw in 2007.

So whats the good news - surely its not all doom and gloom- even Julius has a decent side to him for heavens sake!!!

The good news is that the long-term attractiveness of property is rising due to soaring inflation, man's need for ownership, properties in possession making it feel like a good deal.

Transaction volumes may not return to 2007 levels for a generation but there is an increasing market for scarce property and also toxic for some, but cheap for others properties.

Income streams and big cash owners are still there and the other markets are very scary, try the stock market if you dare..

It is good news for agents and developers promoting almost perfect developments but over the next ten years the world market will be no place to offload huge resorts in slightly out of the way locations.  Look at the death of Golf resorts etc

Lower income spenders are buying cheaper property products and once in the market they will move upwards.

Africa and Brazil are hotter than before as far as business is, China is feeling the pinch and 2011 is just around the corner.

And the best news its almost Christmas.

To All Homeowners out there - Take Heart

After climbing a great hill, one only finds that there are many more hills to climb!"

These are words from Madiba, former President Nelson Mandela.

I find these words so true when I look at the property market over the few years. Although there are globally tentative signs for recovery it is still a path full of hills.

As home owners we can just continue our climb.

be strong, be very strong life is good eeeeeiiiiish!