14 June 2019

South Africa: Home Is Not Where the Heart Is Anymore, It Is Where the Money Is.

analysis

South Africans have always liked property as an asset class. It is a tangible asset, often less volatile than stocks and it provides a place to live. But with more challenges at home, investors are looking further abroad for investment returns, and potentially a future exit strategy.

Although offshore property funds and listed real estate pose a lucrative investment case, experts say bricks and mortar assets should not be discarded. Also, adding to the appeal is the fact that average house price growth in South Africa has not kept up with inflation for several years now, and according to Lighthouse Property is likely to remain subdued.

South Africans don't even have to veer too far from home to find buying opportunities. Since the Mauritian government tweaked its real-estate-investment legislation recently, South African property buyers have flocked to the island's shores. The law now allows foreigners to qualify for residency if they buy property on the island for more than $500,000 (about R7.15-million).

But foreigners aren't just buying into Mauritius for the ocean view. The policymakers have made a significant effort to create an attractive environment for foreign direct investment. The country's business and finance practices are considered one of the...

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