Foreign appetite for SA residential properties nudges upwards
Foreigners made up just under 3% of the total residential property purchases registered at the South Africa’s Deeds Office in 2022, according to research from property data analyst Lightstone.
The data showed that foreigners made up just under 3% (7,776) of the 267,856 residential property purchases in 2022. This was a 2% increase from the 4,604 homes in 2019.
In terms of price bands, 51% of these residential property sales in 2022 were valued at between R1 million and R3 million, making it the largest single category. This trend has continued into 2023, with 1,839 (51%) properties sold up to August in the same category.
There were also 1,048 residential property sales at higher than R3 million in value in 2022, representing 13% of the total, with 1,939 (25%) sales of properties valued between R500,000 and R1 million and a further 837 (11%) sales valued at less than R500,000 in value.
Lightstone said that while the Western Cape was often touted as the emigration and semi-emigration hub of South Africa, Gauteng was actually the preferred choice for foreigners buying property in South Africa, accounting for about 4,000 of the 7,776 sales nationwide. It was followed by the Western Cape (c. 2,000) and KwaZulu-Natal (c. 650).
During the release of the 2022 census, Statistician-General Risenga Maluleke said that Gauteng’s population growth over the last decade has been led by people outside of South Africa, with 50% of immigrants choosing Gauteng as their destination. In the Western Cape, migrants from Gauteng, the Eastern Cape and outside South Africa made an almost equal contribution.
However, the Western Cape is attracting the most upper value band purchases by foreigners, and this is an accelerating trend, increasing from 57% of the total in 2021 to reach 60% in 2022. This trend has continued into 2023, with the proportion rising to 63%.
On the other hand, upper value purchases by foreigners in Gauteng dipped from 33% in 2021 to 31% in 2022. This trend has also continued into 2023, with the proportion falling below 30%. The proportion of upper value purchases by foreigners in the Eastern Cape is also on the decline, while KwaZulu-Natal is more or less consistent.
Lightstone also found that foreigners are buying more Sectional Title (35%) and Estate (20%) properties combined than Freehold properties (45%). It said this was perhaps indicative of a preference for secure, lock-up-and-go properties.
