Where to invest in property in South Africa (2024)

FAQs

Where is the best place to invest in real estate in South Africa? ›

For good opportunities to invest, Stevens suggests "smaller towns near Cape Town like Hermanus, Onrus and Kleinmond to the East, or Langebaan and St Helena up the West Coast".

Property investment is not only a profitable endeavour, but a safe one. Investing in bricks-and-mortar remains the most reliable way to generate income over the long-term.

In South Africa, buying power will likely be on the decline, given that the typical bond repayment will be higher as the markets anticipate further interest rate hikes. Sadly this may price many more buyers out of the market or lower their expectations.

The best interest rate is 12.24% offered by Access Bank Plc on a 5 year fixed deposit investment. This is the highest interest rate you will be able to get in South Africa.

As of July 2022, house prices in South Africa are expected to drop for the seventh consecutive year in 2022. Home sellers are being more realistic in their demands due to the post-COVID economic struggles.

If you are financially secure and can sustain the mortgage loan repayments, then it is probably wise to invest in your own flat. The benefits of owning your own flat or house usually trump that of renting, he said. However, each option carries its own benefits and drawbacks.

There is excellent capital growth and return on investment in the area, which has shown great resilience, even when other parts of the country are facing challenging circ*mstances. The huge demand for properties to buy, and rent, continues to drive the property value upwards.

How to create wealth in South Africa? ›

Stock market return (%, year-on-year) in South Africa was reported at 24.02 % in 2021, according to the World Bank collection of development indicators, compiled from officially recognized sources.

“As there are no foreseeable prospects of higher prices going into next year, serious sellers should not waste the opportunity of a serious offer.” Dyer says investment properties will continue to gain ground in 2023.

There is no definitive answer as to whether it is better to rent or buy in South Africa in 2022. It depends on a number of factors, including your personal circ*mstances, financial situation and the property market in your area. If you are able to buy a property outright, then it may be a better option than renting.

Rode's advice that property is currently not a great asset flies in the face of what some other experts say: owning a home is a good investment, even in 2022, amid rising interest rates and cash-strapped consumers. But you may have to buy and play the waiting game.

“A deposit of R35 000 can secure you a property to the value of R1 million, and a deposit of just R18 800 can get your foot in the door with a property valued at R550 000.

As an example, with an interest-focused investment of R1 million, generating a return of 6.7% over 12 months will mean a return of R67 000 for the year.

For mortgage agreements, the maximum interest rate credit providers can charge a consumer is 18.75% per annum.

How can I invest money wisely in South Africa? ›

Causes of housing inadequacy in South Africa

These are as follows: The Apartheid government. Population growth (migration, urbanisation and demographics)

Upgrade your home security…

In South Africa, this is possibly one of the most important features for resale value. Upgrading your home security will not only be lucrative for you when you decide to sell your property but also gives you peace of mind while you're an occupant.

On average, the cost of buying a home is 20-30% cheaper than building one. Established properties are usually close to amenities such as schools, shopping areas, restaurants, major highways, and public transport.

As a rule of thumb, you should be setting aside 30% of your salary for the home loan repayments. This could change depending on interest rates, and whether you are applying for joint bond ownership with a spouse.

Sellers may tend to lower their price points in Autumn and Winter but it all depends on the markets and external factors at the time. Whenever you choose to buy your home, use your imagination to visualise whether this home and your lifestyle here will still suit you in the other seasons.

Foreigners (whether they be natural persons or legal entities normally domiciled or registered outside South Africa) can invest in property in this country, within limits. Non-residents' investments are not subject to South African tax.

Con: Finding the perfect place for you to live could be expensive. It is important to take into consideration that house prices are notoriously high, especially in certain parts of the city. Other expensive places to live include near the cities natural landmarks such as the beaches and mountains.

Gauteng's South and East Rand has the lowest average house price at R1,183,032, said Dyer. The area has, however, interestingly registered a continual growth in prices. Gauteng is home to the largest percentage of potential first-time homebuyers in South Africa at 20.3%, while the Eastern Cape has the lowest.

How to save $1 million rand in 5 years? ›

1 million within five years by tripling the amount to R8 250 per month. This is where the power of compounding, and time, becomes so important. If you invested R2 750 per month for 15 years, you would have invested R495 000. If the investment grew at 10% per annum, it would be worth over R1.

This falls into the ambit of financial planning, which we cannot do in this forum (we would need to do a full financial needs analysis). Factually, however, you can presently expect to earn interest of around 5%-6% pa (say 5,5%) which would equate to around R5 500 pm (before tax) on R1,2m.

In the long-term, the South Africa Interest Rate is projected to trend around 6.50 percent in 2024 and 6.00 percent in 2025, according to our econometric models. In South Africa, the interest rates decisions are taken by the South African Reserve Bank's Monetary Policy Committee (MPC).

Safety concerns, rolling blackouts, corruption, and economic stagnation are just some of the motives behind high-net-worth individuals (HNWIs) choosing to leave for overseas. Data from New World Wealth and Henley & Partners shows approximately 4 500 HNWIs have left South Africa over the past decade.

A new report on the super rich found that about 30% of those in South Africa studied law, followed by finance and accounting. They mainly made their money in financial and professional services or real estate. Nearly half of SA's super rich either live in or have second homes on so-called lifestyle estates.

The minimum amount that can be invested is R1 000.00 and the investment may not exceed R5 million. More information on investing in RSA Retail Savings Bonds are available at: The RSA Retail Savings Bonds Website - RSA Retail Bonds. RSA Retail Savings Bonds Helpline : 012 315 5888.

African Bank

The first place goes to African Bank, which offers a nominal interest rate of 10.50% percent on a 60-month fixed deposit. 11.02% is the effective interest rate that is earned on the account. The account holder must maintain a minimum deposit of R500. 00 to earn the 10.50% nominal interest rate.

According to conventional wisdom, an annual ROI of approximately 7% or greater is considered a good ROI for an investment in stocks. This is also about the average annual return of the S&P 500, accounting for inflation. Because this is an average, some years your return may be higher; some years they may be lower.

South Africa boasts a good range of properties for buyers, whatever market you're looking to buy in. The CAHF splits the property market into five sections, as follows: Entry market (properties worth R300,000 or lower): 2.1 million properties (32%) Affordable market (R300,000–600,000): 1.4 million (21%)

Are property prices in Cape Town falling? ›

The year-on-year rate of increase in the two house price indices (Lightstone and FNB) moderated to 3.2% and 3.4%, respectively, in August 2022 — well below inflation. Consequently, the Reserve Bank noted, real house prices have declined on a year-on-year basis since December 2021 and by as much as 4.1% in July 2022.

Is it a buyers or sellers market in South Africa? Despite recent interest rate hikes, as of July 2022 the South African property market remains a buyer's market for the time being. This is due to falling house prices. Unfortunately, this is partially due to people struggling to make payments in the wake of COVID.

Anyone may buy and own property in the United States, regardless of citizenship. There are no laws or restrictions that prevent an individual of any foreign citizenship from owning or buying a home in the U.S.

Transfer duty and admin costs

Transfer duty, unlike conveyancing fees, is non-negotiable. This amount is a tax paid by the buyer to the South African Revenue Service (SARS) within six months of the property transfer.

Gauteng's South and East Rand has the lowest average house price at R1,183,032, said Dyer. The area has, however, interestingly registered a continual growth in prices. Gauteng is home to the largest percentage of potential first-time homebuyers in South Africa at 20.3%, while the Eastern Cape has the lowest.

A healthy appetite for risk among South Africa's banks

8 million or less, they can provide a lifeline for first-time buyers. It is important to be aware of the monthly costs of a 105% home loan, but this offering is a significant factor making 2022 a favourable time to enter the property market.

Foreigners (whether they be natural persons or legal entities normally domiciled or registered outside the country) can buy property in South Africa. Foreign buyers or non-residents must comply with local legislation in that regard.

How much is a decent house in South Africa? ›

Agriculture, telecommunication, banking, infrastructure, and oil & gas are some of the most rapidly growing sectors.

The required deposit amount can range from a few thousand rand to 20% of the property purchase price, depending on the seller and estate agent. But most agreements call for a deposit of around 10% of the purchase price. Of course, the bigger your deposit, the better.