HOME is where the heart is…
There has been a large increase in queries regarding local property from expats living abroad which indicates that South Africa is seeing an increase in the number of expats returning home. Is this because of the current economic climate in countries abroad – or is South Africa becoming more and more appealing to those who originally left for greener pastures?
President Jacob Zuma says the country has a chance to lure back South Africans who have settled abroad as the global economic crunch bites. Speaking at the World Economic Forum on Africa at the Cape Town International Convention Centre, Zuma said this is an opportunity for government and business.
A large number of expats are seeing the current economic crisis and the increase in financial and political stability in the wake of the latest South African elections as a sign that the ‘green grass of home’ does indeed seem ‘greener’. The peaceful election and inauguration has also created greater interest in returning home.
Recent research conducted by the Homecoming Revolution, the non-profit organisation that encourages and facilitates the skills to return, show that 81% of South Africans living abroad who participated in the survey said they intended returning to SA in the future. According to the research, which was carried out online with respondents in UK, USA and Canada, Dubai and Australia, those most likely to return were from the UK and the USA/Canada. Of those South Africans living abroad who intend to return to SA, the survey indicates that 1 in 3 want to start their own business upon their return.
Comments Rael Levitt, CEO of Alliance Group: ‘’The property market will definitely benefit from expats returning as they will be looking for homes to either rent or buy and a large number will also require commercial space to start businesses. We will not only see a rise in residential and commercial property demand but also a rise in employment opportunities due to an increase in new businesses. Keen investors have caught on that now is indeed the time to buy as they are seeing the bargains on the auction floors as fantastic investment opportunities.’’
The reaction to the current economic downturn also presents a further opportunity for South Africa, as those expats returning home bring pounds, dollars and euros with them. Comments Jacques du Toit, Senior Property Analyst at Absa Home Loans: “Apparently there is currently a flow of expats coming back as a result of the economic conditions in many other parts of the world. They will obviously need accommodation, maybe renting first, but eventually buying. They will be coming back with hard currency, being able to buy cash or buying in the upper segment of the market. The local market will as a result benefit from these transactions.’’
A large number of individuals, who have been unsure about returning home, have decided to make the move, not only because of the economic climate but also because, on reflection, South Africa is where they want to be. People with investment properties in South Africa are seeing a better return not only from rentals but from ongoing drops in interest rates. For those South Africans living abroad, 77% still have some form of investment in SA – 69% have a bank account, 32% still own a house, and 29% still maintain their SA retirement annuity.
Many experts believe that the property market is starting to show green shoots of recovery which is also attracting expats. Comments John Loos, Property Strategist at FNB: “There is a recovery of sorts in the SA property market in that there seems to be a slight uptick in demand activity. However, it would be some time before this translates into national price inflation, because I believe that the oversupply of property on the market is significant and will take a while to be mopped up. I do believe that there may well have been some slight increase in expats returning home, especially from the likes of Dubai which has come under severe stress.”
A number of expats are also seeing 2010 as a fantastic investment opportunity by purchasing guest houses and hotels. With the exposure South Africa tourism will receive during the Fifa World Cup it is a fantastic opportunity to market their properties to the rest of the world. Adds du Toit: “Some of the expats may see opportunity in the hospitality industry due to the World Cup next year, and will then invest some hard currency in related properties, which will benefit this segment of the market.’’
“SA boasts phenomenal landscapes and wildlife, warm and friendly people, the ability to host world class events and fantastic business opportunities,” adds Levitt, “and there are also many opportunities associated with infrastructure developments ahead of the 2010 Soccer World Cup which is attracting expats. Those who left our shores are now realising that the grass is not always greener on the other side.’’