Know what the six reasons to invest in property in South Africa are. It is never too late to start investing in property #MumbiInvestments
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- Property investment offers relative stability
Investing in the stock market can often bring forth great returns, but it is also very unstable and there is always a possibility that you will lose a lot of your capital. Experts advise that you balance your investment portfolio by choosing a relatively stable option. the property market is the perfect options for short and long term stability.
- Property shortage
The country’s turbulent political past has left a shortage of good housing and the government has made solving the problem a high priority. This focus on housing will result in a long-term structural growth potential in our market, with people migrating to better neighbourhoods and more expensive homes set to continue for a long time to come.
- Property cycles
Many people dream of having their own property and the added sense of security and comfort of a continuously growing asset that goes with it. When young people leave school and first enter the working world, they enter the property cycle through renting a flat then buying one, selling it off and then buying a small house or townhouse. Over the years, they will become more financially secure and then will be able to invest in their dream property, which they are likely to sell once they reach retirement in order to move back into a smaller house or townhouse. The high demand for property means that an astute investor benefits throughout the property cycle, as any investment is bound to provide high returns.
- Stable vs unstable world
With the effects of 9/11 echoing throughout the globe, everyone has now become aware of how extremist attacks can have a profoundly negative effect on the economies and stock markets of the countries affected. Terrorism is a decidedly global problem, but when it comes to South Africa, experts are of the opinion that the country remains one of the least affected by extremist activities. This balanced position is proving the catalyst for property investment interest from abroad. The increase in foreign investment is certainly stimulating an already active economy.
- High property rentals rate
A series of interest rate hikes and escalating inflation has caused an escalation in the number of people choosing to rent rather than buy property. This means that the buy-to-let market is becoming an increasingly popular property investment option around the country, particularly in the bigger cities. Renting a property out will also help you to pay off your bond, while the value of the home steadily increases.
- High growth potential
It has already been said that the shortage of housing in South Africa and the government’s high priority to alleviate this problem means that property investors have a high growth potential. The growth is also due to the development of a strong middle class, which is providing an increase in the demand for homes. In terms of facts and figures, the housing market in the Western Cape is showing a steady growth of 13.9%, while other metropolitan areas are growing at an annual rate of 15.6%. As we all know, a steadily increasing demand translates into high returns on a long term investment basis.
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