When apartheid ended in 1994, the tourism industry in South Africa began to boom and visitor numbers grew dramatically. Tourists soon became mesmerised by the country’s beautiful scenery and outdoor way of life and many people ended up purchasing property for either investment or lifestyle reasons.
Since the 2010 World Cup, property prices have stalled slightly and overseas interest has remained quite low. However, following the death of Nelson Mandela and the release of his biopic film “Long Walk to Freedom”, the country is again gaining positive attention, which should hopefully once again boost tourist numbers and in turn, the property market.
South Africa was under British rule until 1910 and the influences are still clear to see with the two countries having similar banking systems, parliaments and property laws in place. The main difference is the weather, with South Africa enjoying an average 9 hours of sunshine a day. The cost of living is also a lot lower in comparison to the UK, meaning your money goes much further.
Cape Town still remains a popular choice for British expats looking to relocate to South Africa and some of the most sought after areas are Constantia and the Atlantic Seaboard. Constantia is located just outside the city centre and is only a short drive away from both Cape Town and the beach, making it an attractive option. The Atlantic Seaboard is made up of prime seafront real estate and exclusive developments and you will find property prices are much higher here than in the city bowl.
There are no restrictions in place for non-residents who want to purchase a property in South Africa and banks are currently willing to lend applicants a maximum loan to value of 50% on a residential property and vacant land. If you are purchasing a property jointly with a South African resident then banks may even be willing to lend you up to a maximum of 70%.
When purchasing a property you will need to provide proof that the funds for the deposit have physically entered the country (this can be done through a Transferring or Conveyancing Attorney), so that when the property is sold, the deposit plus any profit can be released to the country of origin. As a non-resident it is not essential that you open a South African bank account, but some bank mortgage terms insist you do this as this would then facilitate the transferring of funds and monthly repayments of the loan.
It is advised that you seek independent legal advice during the buying process, as the process is not similar to the UK, in South Africa once you have exchanged contracts on a property there is no way you can simply withdraw from it without losing all of your deposit.
This article was first published on Prime Location here: