The ins and outs of buying property in South Africa as an expat
Explore the pros and cons of buying property in South Africa as an expat, from affordability to economic risks and lifestyle perks.
According to FNB’s Property Barometer, property sales linked to emigration remain largely unchanged at the 8% mark and are linked to the prevailing trend of skilled South Africans moving overseas in search of better economic prospects and a higher safety assurance.
“However, in recent years, there have been further reports of reverse emigration, where South Africans do return to South Africa after years of living abroad,” says Grant Smee, CEO of Only Realty Property Group.
Property Market Trends and Expats Returning Home
Smee himself is unsurprised that many expats are choosing to return, given the abundance of lifestyle benefits that living in South Africa offers, as well as the relative ease and affordability of buying property here compared to international markets.
“As an example, the average price of a one-bedroom flat in Central London is currently £1 million (more than R23 million), according to Coohom. Even for those earning pounds in a high-paying role, that is hugely expensive, and you’re not getting much ‘bang for your buck’.”
House Prices in South Africa vs Overseas
In contrast, R11.95 million in South Africa could secure a four-bedroom home on Cape Town’s most sought-after seaboard in Sea Point or a mansion with a heated pool and sauna in Johannesburg’s Houghton Estate.
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“As opposed to a small lock-up-and-go unit in London, with R23 million in South Africa, one can purchase a five-bedroom home on the exclusive Val de Vie Estate in Paarl, illustrating the clear difference.”
Australia is another hugely popular destination for South African emigrants, with the Sydney suburb of St Ives having the highest population of expats, according to the Australian Bureau of Statistics. The average price of a three-bedroom home in the neighbourhood stands at $2.4 million (R28 million).
“Keeping in mind that none of these comparative properties overseas are particularly fancy or large homes, it’s unsurprising that many expats, especially those with families, are choosing to return to South Africa, where the money they earned while working overseas can go much further,” says Smee.
“South Africa also offers a host of lifestyle benefits, many of which are reserved as luxuries for the ultra-rich in other countries. These include affordable private education, spacious homes, domestic labour, and comparatively affordable private healthcare, holiday destinations, and world-class restaurants.”
The decision to buy property in South Africa is further boosted by attractive lending conditions from the country’s banks, with a high national bond approval rate of 83%, according to the Q4 2024 oobarometer from ooba Home Loans.
Drawbacks of Buying Property in South Africa
However, there are potential disadvantages of choosing to invest in property here versus overseas, which Smee outlines as follows:
Economic fluctuations: “While the Western Cape’s property market remains resilient and the strongest it has been, our currency is far weaker than the likes of the dollar, pound, and euro. When it comes time to sell your property, the rand may be weaker than it was at the time of purchase, and this could result in you making a loss.”
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Loadshedding: The ongoing energy crisis has had a significant impact on the property market, with houses that come equipped with alternative power systems in high demand. “Expats buying South African property should look for homes with solar panels or other off-grid resilience measures or prioritise installing these soon after taking ownership.”
Crime rates: High crime rates in certain areas can affect the overall safety and security of property owners. “As a prospective buyer, you should research the crime rates in specific neighbourhoods before making a purchase.”
Expropriation of Land Act: South Africa implemented a new law to govern the expropriation (compulsory acquisition) of land. Under the Expropriation Act 13 of 2024, the government has the right to seize properties for public purposes or in the public interest. “This is a hot topic and something that some are concerned about,” says Smee. “However, the state cannot force people off their land as an immediate action. This law has, in fact, always been in play, so while it is nothing to be too concerned about, it’s something to be aware of. This happens all over the world and is implemented by the likes of the US.”
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Ultimately, Smee believes that the benefits of buying property in South Africa outweigh these possible challenges. “We have one of the most ‘affordable’ luxury property markets in the world.”
“Add factors like great weather year-round, beautiful natural scenery, world-class dining, and friendly locals into the mix, and it’s no wonder that expats are flocking home in droves,” he concludes.