Are you planning to sell your property in South Africa fast? South Africa has been through serious economic troubles recently. The country has a lot of potential but in recent years has seen a lot of political and economic turbulence.
The biggest blow to South African economy in recent times was the rating downgrade of the South African sovereign debt to “sub- investment” status. The question is what does this mean for you if you have a property for sale in South Africa.
First, it is important to note that the rating downgrade was expected. The fact that global rating agencies such as Standard & Poor would downgrade South Africa to sub investment grade is no surprise. The South African economy has been underperforming for many years now.
The South African property market, on the other hand, was doing quite well. It was largely insulated from the rest of the economy and was seen as a safe haven for investment, especially at a time when banks were at risk of collapsing and the stock markets were failing the investing public.
But the property market will certainly be affected by the rating downgrade. For one, it is going to increase the cost of debt for the government, so the interest rates will be increased by the central bank of South Africa.
This means much higher mortgage rates, which was high to begin with. This makes property investment even more expensive than it had been in recent years.
The fact is the government in South Africa has not really welcomed foreign investment in the property market here. They have fought back against any interest from overseas investors through obscurantist regulations and laws. This is a big mistake as South Africa needs to welcome more foreign investment and not adopt a protectionist attitude.
But the recent downgrade won’t help because many investment firms will not strike off South Africa from their list of options. This is not to say that there is no interest in South African properties. There are millions of South African expats out there settled in the UK, USA, Australia and New Zealand and many want to hold on to their ties with their homeland.
The best way to do that is to buy property in South Africa online, as many have been doing. This interest in South African properties has nothing to do with the recent economic environment in the country and is for many an emotional decision.
South African cities such as Pretoria, Johannesburg, Durban and especially Cape Town will always attract overseas property seekers. That is not going to change. Cape Town will remain one of the best places to live in the world.
But even the most patriotic of South African expats will desperately want the situation in the country to improve and cannot keep investing in the country for much longer if there are no big changes seen at the ground level. Hope the government takes note.