Few destinations capture the imagination of investors in the same way as South Africa. Throughout history, investors and speculators have travelled to this beautiful part of the world, seeking to capitalise on the country’s wealth of natural resources and stunning natural beauty. In the modern day, the focus may have shifted away from gold, however the opportunities still exist in abundance, and many now see South Africa as one of the next major emerging property markets.
When looking at the opportunities for growth and development in South Africa, the focus of investors surrounds the country’s huge potential for tourism. Today, destinations such as Cape Town, Kwazulu Natal and the ever popular Garden Route are becoming increasingly well travelled by visitors from overseas, many of whom are choosing to return, purchasing second and holiday homes as long term investments.
Away from the southern coastal routes of the Western Cape, many suggest that the emerging market within South Africa is in fact further north, in the coastal regions of Kwazulu Natal. Here, destinations such as Ballito are only today really beginning to fulfil their considerable potential for tourism, capitalising on the superb beaches and abundant wildlife which can be found throughout the region. Throughout the past couple of years, a number of superb new eco-resorts have been announced throughout the Kwazulu Natal region, providing visitors with an opportunity to experience what many consider to be a more genuine African experience.
Whilst the focus of investor’s attention has typically been on the tourist destinations, there is also a growing demand for property in the rich urban areas surrounding Johannesburg. Indeed, throughout the entire Gauteng region, a large number of multi-national corporations have chosen to situate their African headquarters, creating an increasing demand for middle range and executive properties throughout the region. Far from the traditional conceptions of Johannesburg as the crime capital of Africa, the city is beginning to make considerable strides towards becoming a global financial and commercial hub for Africa.
As seen in so many other markets, there is likely to be a notable ‘knock-on’ effect on the demand for property in South Africa. On the back of these increases in tourists visiting the region, the potential for short term and holiday rental property in South Africa is considerable. With many visitors chosing to stay in the country for a prolonged period, increasing numbers of tourists in South Africa chose to travel to multiple destinations. Often chosing to stay in apartments and villas for shorter periods, popular tourist trails such as the Garden Route provide superb investment opportunities for investors looking to buy property in South Africa.
When considering the opportunities for investing in South Africa, it is worth also considering the global media attention that will be experienced by South Africa during next years 2010 World Cup. Indeed it is likely that the country will experience a considerable increase in tourism on the back of the World Cup, as people become exposed to the wealth of available opportunities throughout the country for the very first time. With a global audience of billions watching the month long tournament, and hundreds of thousands of fans set to descend upon the games, the impact on the country’s tourism industry will be an important legacy for the foreseeable future.
Despite the considerable potential for investment return in South Africa, it would be remiss to look at the region as a short term investment. Indeed, the appropriate due diligence would demand a full consideration of the social, political and demographic climate of the region. Over the past 20 years, South Africa has experienced considerable change, and few would argue that there is some way to go. However, these changes have undoubtedly sowed the seeds of economic prosperity, and in the long term the benefits will be substantial to the country as a whole.