In and around the port city of Durban, developers, investors and homeowners are increasingly lured by estate communities and beachfront homes.
Housing market dangers are “especially acute” in Australia, Hong Kong, Canada and Sweden, Oxford Economics said, noting this has historically posed a threat to economic activity.
In recent years, South Africa has been weathering not only concerns about political corruption but also currency devaluation and a rocky economy. And those difficulties have adversely affected local residential real estate markets, particularly in the last 18 months, said Rupert Finnemore, the regional head of Pam Golding Properties in Gauteng.
“Home prices are very undervalued” in Johannesburg, said Ronald Ennik, the principal of Ennik Estates, an affiliate of Christie’s International Real Estate. “It’s the cheapest it’s been in 20 years.”
The combination of a favorable exchange rate, a shortage of available properties (partly because of a diminishing supply of developable land) and the pleasant climate has driven up prices along Cape Town’s Atlantic coast at unprecedented rates, agents say.
“With the downturn in the local currency, it’s making it very cheap for foreigners to buy,” said Denise Dogon, the chief executive and founder of Dogon Group Properties.
Over the last year, prices across all ranges have risen an average of 25 percent to 30 percent, with luxury apartment values escalating the most, said Laurie Wener, managing director for the Western Cape region for Pam Golding Properties, a real estate firm covering sub-Saharan Africa.
“The Atlantic seaboard has really become the place where people want to retire,” she said. “There are some very luxurious apartments to choose from with views of sea and mountains. And from an investment point of view, it’s a very recession-proof market. It’s quite densely populated, but prices hold.”
South Africa has the highest number of dollar millionaires in Africa, according to a new report.
According to a report by AfrAsia Bank and New World Wealth, Johannesburg alone, known as the "city of gold", is home to 23,400 millionaires. South Africa has 30% of the total.
Egypt's Cairo comes second with 10,200, with Nigeria's Lagos third with 9,100.
Law firms are gearing themselves up to respond to the needs of a growing number of international investors, keen to investigate opportunities in African real estate markets, attracted by the continent’s economic and demographic growth prospects.
According to the Africa Report 2015, issued by Knight Frank in March 2015, the population of Africa will quadruple to over four billion by 2100, with nearly one billion of these people in Nigeria alone – a significant demographic trend for all businesses, not just property developers.
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