The Sunday Business Post-South Africa

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Claragh

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The Sunday Business Post has a number of interesting articles today about South African property. Having been to Cape Town with the Niall Mellon Initiative the last 3 years I can see the need for more housing. But how can a small Irish investor invest with minimal risk in the building boom that is taking place there?
 
Beware of anything in the SBP property, or most of the papers, or even tv. They're generally no more than paid for adverts that too often lead folks up a cul de sac. A former colleague from frankfurt have just sold off his "ranch" near Bloemfontein and I know he broke even, that's after investing in it.
 
Claragh said:
The Sunday Business Post has a number of interesting articles today about South African property. Having been to Cape Town with the Niall Mellon Initiative the last 3 years I can see the need for more housing. But how can a small Irish investor invest with minimal risk in the building boom that is taking place there?
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There are issues with getting money out of SA also...tread very carefully. When Nelson Mandela dies things could go either way
 
In what way Kal? The money transfer I mean, not challenging, just interested.
 
almo said:
In what way Kal? The money transfer I mean, not challenging, just interested.
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There are strict exchange controls in place...not as strict as they were but still tight. Last time I checked you could take c.€75K out of the country but even then it was tricky. I've quite a few friends down there who syphon money out of the country to the UK and here by all kinds of elaborate methods. A couple of years ago an Irish friend lived there for 6 months and had difficulties getting the proceeds of a car sale out. Until I thought being a foreigner would mzke things easier.
I love the country but it worry me, in fact I've swerved buying a property and investing in a business for these reasons.
Plus, as I said earlier any South African will tell you that despite being retired, Mandela still exerts a huge amoun t of power. He practically vetoes any extreme policies Mbeki's government try and implement. When he dies, who knows what will happen? That's why my friends keep so much money off-shore. And if they're so keen to get money out why are we so keen to put money in would be my attitude.
 
Sounds rather unstable and scary, but would the Mbeki government go down the Mugabe route, or just nationalise everything? I had hoped they'd take a stand against Zimbabwe the week before last, but they just gave the government there a pat on the back. I know that there is a lot being spoken about the World Cup and so on, but would there be the kind of increase in revenues that would make a difference? I know here in Croatia the government are desperately wanting to win the 2012 European Championships with Hungary, but not alone are the stadiums in both places a joke, the supporters a disgrace, but the long term, even short term, gain is not there. would the World Cup in South Africa make a major difference to long term investment return?
 
Also keep an eye on the exchange rate. The rand has dropped heavily in the last few years and looks set to drop more. A lot of irish buyers have been badly burned in SA in the last two or three years, from paying too much in the first place and from the currency drop. I know one buyer who recently got out with half his money exactly, not a great return for three years "investment". I warned him at the time, but he was golfing with friends there and they were all buying......

And yes, he had money transfer issues, but brought it over in a few segments as far as I know.
 
It's still in the balance whether the World Cup will even be staged there. Infrastructure projects are way behind schedule and FIFA actually have a contingency plan in place to hold it elsewhere. Some of what's happening is quite upsetting actually...the shanty towns along the motorways are being moved because they are unsightly for example. Just moved, no extra housing built.
I'll bet the money transfer issues are never mentioned at these property sales in the Red Cow or wherever! It can be banana republic stuff...carrying briefcases of cash with you etc.
Having said that, it's easy to fall in love with the beauty of the place and the cost of living. Plus they seem to be preprogrammed to encourage inward investment. I'm glad I swerved the few opportunities I've had though.
 
and now the sunday times has joined in. few years ago everyone on tv was promoting South Africa heavily. can distinctly remember a program with a tv presenter ( Brendan somebody or other) who was doing foreign property programs and he stated he had purchased a few propertys. Came across an article recently where he had sold a few years ago and got out completely. But how may were swayed by his earlier program and who are still in situ?
 
MOPRF said:
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South Africa can be a very good market if you have friends in the industry and 10% deposits are required and only 90% on completion.
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With such instability in the rand, as well as uncertainty in many social areas, I think not!
 
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