BiggerPockets

Does anyone know what the current real estate market is in South Africa? I have family over there and was looking to invest. Where could I look to find out this information?

I visited RSA for the first time in August and it is definitely a buyers market because they just finished having a run up on real estate values and the market is in the middle of a correction. They are still experiencing a lot of turmoil from the apartheid and of course the country is bankrupt and the government there is on shaky ground with most of it having resigned over the last few months. The crime is rampant as the Zimbabweans are flooding in as the young South Africans are fleeing across the globe in search of opportunity of finding a real job that they can't land at home. Protectionism from outside investors and Socialism seems to be the big thing spreading there as the government has been on the move taking over privately held companies and the other big movement is affirmative action, wait a minute, that seems to be what we're now doing over here??? No, no, no.... Actually it is amazing how capitalism seems to be thriving here compared to the model country on that continent.
The food and drinks there are cheap, but the cost of clothing, cars, etc. are all imported and priced similarly to what you'd pay here in the states. So the big problem for the Afrikans is they have high unemployment, and the ones who do work get paid very low salaries(i.e.- a policeman there makes around $10,000 US a year) combine that with a the fixed costs of a car, clothes, etc. and the interest rates there on an ARM is 15 1/2 % and if you want a fixed rate note it's around 18%!!!! They do have some beautiful beaches and very friendly people for the most part, of course I didn't slow down around the "Flats" or homeless villages that were everywhere.
But look at the bright side, the value of the dollar has gone up from 7.5 rand to just over 10 rand per dollar in just a couple months so you may be buying at a discount, and they will be hosting the 2010 soccer world cup so they're in the process of trying to clean up everything around the venues before they shut the country down... It is mind boggling that a country/continent that is quite possibly the richest in the world in natural resources can be so poor.....
Zaak, I believe you can keep up with RSA by googling and reading a few of the many newspapers that they post online. Good Luck....
TC

Hello,

I have been lurking on the forum mainly reading whats going down in the USA and how the financial crisis is unfolding. I have just only stumbled on this post today...

Anyway as I am a full time property investor in Durban South Africa I may be able to shed some light on the subject... :)

To be honest whats going down in the USA is having shock waves throughout the world and the SA property market is suffering. Banks where giving 100% loans + closing costs a year ago but in todays market you need to have at least a 20% to 40% deposit. The result is that buyers are few and prices have not dropped that drastically.

Typically SA has high interest rates but currently our reserve bank is dropping rates which started in dec 08. Currently we are at 13% as the prime lending rate. It is expected to drop another 2% before year end. (thats historically low by our standards!)

I am active in buy to let with current deals I am buying giving me a yield of about 15%. I also do wholesaling and flipping.

The opportunity for you guys in the USA would be that if you have cash or can borrow money from the USA and make returns of 13 to 15% on SA property rental yields. It would also allow you to get out of the dollar if you think the current tactics by Bernanke and team will lead to the weakening of the dollar.

Now regarding Tommys comments... sorry buddy but your snapshot is not very accurate !

Yes indeed we are a emerging market, but SA is both 1st and 3rd world all rolled into one. We have houses in the middle class suburbs which can compare with anything the USA or UK can offer, with good infrastructure, shops and stuff.

Then there is the other side where there are the poor. This is where we have our challenges... A interesting theme is that our inner cities have seen decay over the last 15 + years and we are staring to see a positive turn around. Most property investors are buying in these areas as rental income streams are good. This market and its tenant profile is the emerging middle class. 2 bed apartments sell for about $35 000.

Typical 3 bed, 2 bath houses in the suburbs (2500sqf) with double garage and a pool sell for about $105 000. rental income in this market is not that good at the moment.

Our banks are in good shape and have weathered the storm well but the global credit crunch has made our banks cautious.

The funny thing is the types of deals/properties that work in the USA work here. Its just slight differences in the details..