The entry point for South Africans buying property in Europe is lower than you might think – these countries offer the best options

A stronger rand, coupled with pressure on major currencies, arguably offers the best time for South Africans to invest abroad, particularly in real estate, say Andrew Rissik, Managing Director, and Megan Copley, Managing Director , Sable International Offshore Property.

Now is a good time to buy in the European market, with the rand doing well and interest rates remaining low. The temporary good strength of the rand, driven by the uncertainty in the East, is putting pressure on the so-called “hard currencies” and we are seeing a run in commodity prices, which are all positive for the rand.

Buying property in Europe can seem inaccessible even to wealthy South Africans. However, the entry point for offshore property investments is lower than most people think, with loans available to most investors and a minimum investment threshold of R1-2 million.

Why should South Africans consider investing abroad?

We are not encouraging a mass exodus from South Africa, nor advocating a brain drain. South Africa is beautiful and its people should love living in the country, but they should never forget to take advantage of their foreign capital allowances and consider buying offshore assets as part of their balancing strategy and hedging – offshore properties are a great way to do this. .

What makes it interesting is that it is much easier to get a mortgage on property in the UK and Europe than we often think. Sable International offer professional real estate advice on property around the world, and in many cases where you can deposit as little as £75,000 and with a low interest loan you could get anything from £250,000 at £300,000.

£250,000 is a sweet spot for the South African investor market. Rather build a portfolio where you have low interest rates and high rental returns than the reverse in South Africa where interest rates are high and rental returns are quite low due to affordability.

Which countries offer good real estate investment options for South Africans?

Germany, the UK and Portugal all represent good circumstances for foreign investment at the moment.

Portugal is an excellent place to invest; an investor or buyer can purchase a golden visa or the path to a golden visa. This is different; you can actually invest in real estate regardless of the EU nationality passport option. Real estate in Portugal is a haven of peace, and they have just had an excellent tourist rating. Lisbon is an Alpha city of Europe that attracts tech nomads.

The city offers job prospects, a pleasant living environment and a rich culture. South Africans are attracted to places where they can find a community of other South Africans, and Portugal has already attracted many expatriate South Africans.

What makes the UK an attractive option for South Africans?

The UK has been through Brexit and Covid, but it’s still a strong market. The Pound is relatively weaker against the Rand at present, currently trading below the R20 mark.

The British market is interesting because it attracts a lot of foreign investment. People have so much faith in the UK, and value is about trust. How you buy and why you buy shows how confident you are in a market and its stability, and the

The British property market has always remained one of the most stable. Even though there have been declines in property prices, there has been an overall increase in these prices year over year. Although there was a period during the recession when house prices fell, they are again rising from those previous crash prices.

The UK has an abundance of mortgages and interest rates are lower

There are real estate markets in the UK, for example, major UK cities and outlying towns where one can buy property with 2 million rand and take out a mortgage abroad, because South- Africans can get mortgages in the UK. There are many lenders, over 87 loan types available, and interest rates are significantly lower than in South Africa.

Which UK cities should South African investors consider?

Foreign investors should look out London, because it is one of the most expensive cities in the world. Currently, most of the properties we sell are in birmingham and Manchester, or on the outskirts of these cities. There is a strong demand for housing and tenants as well as significant infrastructure improvements and government investments in these cities.

New build properties are ideal for an investor as there are fewer hassles. The developer is responsible for a guarantee on the construction. All your appliances and accessories will be brand new.

So, from a practical point of view, there is less maintenance. If you were to deposit between £50,000 and £100,000 – around R1-2 million, you could find an asset worth around £175,000 to around £350,000. And it can range from a studio to a two-bedroom apartment.

Offshore investments allow South Africans to grow their wealth

There are many reasons to invest abroad. One is the hard currencies in Europe and Britain, which have lower volatility than the rand, making them safe haven currencies where you can build an investment portfolio. Offshore real estate investments are feasible.

With sound and well-thought-out overseas property investments, South Africans can both increase their wealth through capital appreciation of the asset, but also hedge their currency in Euros, Pounds or Dollars and , in many cases, taking out a mortgage at a very low price. interest rate or have passive income through a buy-to-let investment. This offers a tangible and solid investment.

  • By Andrew Rissik, Managing Director, and Megan Copley, Director, Sable International Offshore Property

Read: Offices in South Africa face a new working-from-home headache

Mary I. Bruner