South africa: can currency help?

The real estate market in South Africa is experiencing the toughest conditions most people can remember but it is hoped that currency fluctuations could help recovery...

Samuel Seeff, Chairman of the Seeff property group, which sold the country's most expensive apartment earlier this year, said volumes are down and conditions are tough.

'Were in the toughest market I've experienced in real estate. Even at the top end of the market things have become quieter,' he said.

Seeff, like other agencies, is not expecting a bumper summer by any stretch of the imagination. He says for his agency and others right now the game is about survival - about questioning every cost and cutting overhead spending.

But others are more optimistic. Berry Everitt, Managing Director of Chas Everitt International believes interest from foreign property investors could be a trend that helps a recovery in the real estate market.

'There's a new mood of optimism sweeping through the global property market in the wake of the US election outcome, and it's generating renewed interest in South African real estate,' he said.

He predicts that European buyers in particular will be interested in investing in SA property once more, thanks to the weakness of the rand against their currencies and the relatively low prices.

'In addition, the South African market is in good shape and likely to recover faster from the global economic meltdown than the major European markets and the devastated US market, which means there are better prospects here for capital growth,' he added.

'Over the past two months the number of enquiries we have received from foreign buyers has increased substantially,' he said but added; 'This does not mean, though, that South African sellers will suddenly all find foreign buyers knocking on their door.'

German, Dutch, Scandinavian and UK buyers who are interested in South Africa tend to target the more expensive, lifestyle properties. While some foreign owners are selling because of the economic crisis those with money to spend are still looking and believe that they can find good prices.

Source: www.propertywire.com