Cape Town, South Africa.

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Claragh

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I would like to start a tread which will debate the buy-to-let market in Cape Town, South Africa. Any advice welcome.
 
I can't speak on the BTL market, but I visited there recently to find that the whites (currently make up most of the professional classes) do not live in the city for the most part and prefer to commute from the suburbs and neighbouring areas where they have more security. Those I talked to were quite fearful of their future, so if you do buy there you would have to do some deep thinking about whether you will be able to sell in 15/20/30 years.
 
Thanks hmmm. Your quite right security is a major issue in South Africa. However things are changing. There are now 2 million middle class Black South Africans and with the Government pushing to "Clean Up" the country before the 2010 World Cup. Major house building programs like the Niall Mellon Initiative which I'm a part of will help change townships from qualler to modern estates. I don't believe South Africa will make the same mistakes as other african states who gained freedom only to ruin it by kicking out the white man. There is a major attempt by the Government to repatriate white South Africans back to South Africa. South Africa has alot going for it but only time will tell if it can deliver a stable modern country.
 
other issues include the stability of the currency. SA is a resource-dependent country so its economic fortunes are linked to the prices of a number of hard commodities. the current weakness in the rand is a benefit if you are buying but it could act as a drag if you a hoping that rand rent will cover a euro mortgage.

in addition, the distance is another consideration. an annual visit could eat up a lot of your rental income.
 
Probable makeup of the next government is a real cause for concern. Some of the stuff coming from the guy who is tipped as next President is scary from an investor point of view. The rand has dropped heavily in the last year and looks set to go down again. Best advice is to avoid SA right now, unless you intend to live there.
 
Capetown great value particularly at present exchange rate. Security is a real concern though. Police do not inspire confidence and spend a disproportunate time on the easy option of collecting fines for minor traffic offences. Most of the coloured people lack confidence in future government's ability to stamp out corruption & reduce crime rates. Having said this Capetown is a lot better than other cities i.e. Jo'burg & Durban. I love the Cape but would not take the investment risk in present climate.
 
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