Luxury property investments are currently on the rise in South Africa, especially in the Western Cape, where foreign investors are making the most of breathtaking views, safer surroundings and great returns on their investments.
Seeff shines the spotlight on luxury property investments in South Africa and everything you need to know.
South African real estate is still a great investment
Despite the global turmoil of recent years, bricks and mortar have shown themselves to be resilient investments in South Africa. Real estate investment remains one of the most reliable ways to generate income over the long term. Sectional titles – and specifically apartments – continue to be an extremely popular form of luxury property investment, with a majority of South Africa’s high-net-worth individuals owning homes or apartments in luxury developments.
Research the area you want to invest in
Researching an area that you’re considering making a luxury property investment in involves more than getting a solid feel for the neighbourhood by driving around it at various times of the week. It involves asking your property practitioner for property growth value projections and speaking to an accountant to discuss the tax implications of investing in a second property.
A high price does not necessarily mean a great investment
The fact that a property comes with a high price tag does not necessarily mean it is a good luxury real estate investment. Factors that you need to consider include the market (are property prices in the area trending upwards?) and the property itself (is there anything that would affect its resale value?). An experienced property practitioner will be invaluable in helping you find the right luxury real estate investment. Another factor that makes a good investment is the neighbourhood. Ask your property practitioner what the crime rate is like in the area and whether there are good schools and amenities nearby.
An example of a great luxury property investment is this stunning three-bedroom apartment in Camps Bay. As a whole, the city of Cape Town is known as an appealing investment destination as a result of its good governance, thriving startup ecosystem, strong infrastructure – and of course – breathtaking scenery. Within this environment, Camps Bay has a great reputation as a luxury enclave and a hotspot of entertainment and culture. The property itself boasts all the advantages of sectional title living, as well as features like its own pool, a double garage and access to a private beach.
Top six factors to consider when investing in luxury real estate
1. Make sure that the price you’re paying is a fair market value. Linked to this, get the property thoroughly inspected to make sure that there are no hidden defects that the seller might not know about.
2. If you’re buying a luxury property within a sectional title scheme, be aware that body corporate rules will apply to you. Make sure you’ve read a copy of the complex or estate’s rules and that you’re comfortable with them. Also, ensure that you’ve scrutinised the body corporate’s financial statements.
3. Look at what is happening in the area around your prospective luxury investment. Consider possible future developments in the area and whether these would be positive or negative for you.
4. Look at recent sales data for the area to get a solid idea of fair pricing and what you should be able to buy within your budget.
5. Choose the right property practitioner to help you make your purchase. Work with a company and an individual that you’re comfortable with.
6. Make sure that you have insured your asset sufficiently. For buildings insurance purposes, your asset should be valued at its current replacement cost.
With decades of experience in the South African property market, Seeff is here to help you invest in luxury property – whether you’re doing so from our shores or an international location. Contact us today and let’s make your luxury property dreams a reality.
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