Moody’s decision to keep South Africa’s credit rating stable is an incredibly positive one that ought to stimulate foreign investment within the country, says Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa.
“The housing market has had several wins over the last few weeks – the first of which being the MPC’s announcement to keep interest rates unchanged, and the second of which being Moody’s decision not to downgrade our credit rating. Both imply faith in a stable outlook for our economic future, which is a victory for all South Africans,” says Goslett.
Beyond having a beneficial effect on locals, Goslett predicts that these decisions will also have a positive impact on the state of the South African housing market in general. “We remain hopeful that these announcements will renew activity within the housing market, but only anticipate a real turnaround post election when more political and economic certainty can be realised,” Goslett predicts.
Foreign sales up from 2018
That being said, certain nodes have already begun to reflect growth, particularly in the foreign buyers’ market. According to the RE/MAX Living office, which operates in the Cape, Cape Town remains an attractive option for foreign buyers. Over the last year (January 2018 – January 2019), 12.5% of the office’s mandates were sold to foreign buyers, which is an increase on the previous year’s 10%. 26% of these sales were over R10m, with 8% being over R20m. The highest-priced property sold during 2018 by a RE/MAX Living agent to a foreign buyer was priced at R32m.
“Our figures indicate that Cape Town (including City Bowl, Atlantic Seaboard and Western Seaboard specifically) is still viewed as an attractive investment for foreign buyers. At RE/MAX Living, we have experienced an increase in the number of foreign buyers (the majority being from Europe) buying property here compared to previous years,” explains Susan Watts, broker/owner of RE/MAX Living.
Following the positive outcomes experienced thus far, Goslett therefore predicts that, provided SA’s outlook remains positive, foreign buyers will continue to be attracted to our markets in the year ahead.