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Property Talk

Property Talk

Author: Trushanta Somary
Date: 2012-04-05
Seller's of higher end residential properties along the Dolphin Coast often have misplaced perceptions of the level of activity of foreign buyers active within the area.

The idea that a property can somehow be priced higher and aimed at a "foreign market" are fundamentally flawed and indicate a lack of understanding of how foreigners would shop for and purchase property.

Although we acknowledge the existence of a few large transactions recently by non-South African residents within the Dolphin Coast area, these transactions are the exception and do not represent the market.

The level of foreign buying is very small in a flagship estate such as Zimbali Coastal Resort, and almost non-existent across other estates and areas of the Dolphin Coast. Foreign buyers are astute, have access to all the information a local buyer would have, and are more inclined than ever to negotiate harder to achieve the best price possible.

The demographics of the foreign buyers we are exposed to have also changed recently. To a far greater extent our "foreign" buyers can be expected to come from Africa, Asia or India rather than the more traditional destination countries within Europe.

FNB's recently published report on the impact of foreign buying in South Africa, indicates that the number of African foreign buying as a percentage of total Foreign buying has increased from an estimated 8,5% in 2010 to 20% as at 1st quarter of 2012.

The same report estimates total foreign buying in South Africa as a percentage of all South African homebuyers to be 4%. What is also evident from the statistics is that far fewer South Africans are selling their homes in order to emigrate. As of the 1st quarter of 2012 this estimate is 4%, which can be seen in perspective when considering this was 20% in the 3rd quarter of 2008. The estimate of buying of local properties by Expats is a relatively steady 3% showing that there is only a net 1% sell off by South Africans in today's market. As a seller your pricing strategy and ability to find a willing an able buyer for your home is determined by the market and only assisted by the quality of estate agent you choose to work with.

Hoping to somehow capture the attention of an unsuspecting foreign buyer with an over-priced property is unrealistic.