Property markets in South Africa have had a rough go of it lately when all factors are considered. This is due to a combination of the worldwide slump in property and the interest rates being raised consistently in a streak over the last two years by the South African Reserve Bank.
However, a number of factors suggest that property might start to become very attractive again in South Africa, starting with the bank's recent decision to allow interest rates to stay put.
Aside from that however, the main reason for people wanting to move to South Africa still remains. That reason is that a lot of the countryside is absolutely stunning visually and attracts many tourists each year. The demand to buy property in cities like Cape Town is still quite high and indeed it is primarily that demand that has allowed the property market of South Africa to remain afloat while the markets in other developed countries have tanked.
Another change that has happened is the change in strategy that many investors are starting to take. An example of this can be seen in Pangbourne Properties, which up until the present had employed a strategy of acquiring stock positions in many different companies in order to make part of their money. This strategy, which Pangbourne fondly referred to as their "Octopus strategy", appears to be changing as they start collapsing their investments into bigger stakes in a lower number of companies.
Finally, the weakening of the Rand will also play a factor in the South African property market. Specifically, the weakening of the Rand will make high-end properties in the country more attractive to rich foreign investors that are looking for properties as seasonal homes first and investments second.
These four factors combined could be enough to restart the steady gains that the South African market has been known for getting, although only time will tell if a causal relationship does indeed exist.
