Estate Agents urgued to sell South Africa first
BULGARIA, which has an antiquated deeds system and an unsophisticated property market, is attracting far more English and Irish property investors than SA, which has a first-world deeds system and property market.
So says Scott Picken, MD of International Property Solutions (IPS), which helps people living overseas invest in property in SA with particular focus on South African expatriates and English and Irish investors.
Picken says the main reason for this is that Bulgarian property developers and real-estate agents promote Bulgaria first before their individual developments, while their South African counterparts, who are too busy competing with each other, do the opposite.
Picken says foreign property ownership enhances the perception of a country and increases foreign direct investment -- an important ingredient needed to boost SA's stable economy and slash unemployment.
"What we tend to find is that countries like Bulgaria are very good at selling their countries and developers and estate agents work together to sell Bulgaria first. By doing this they have created the impression that Bulgaria is an up-and-coming market and consequently many British and Irish investors are investing there," says Picken.
"The problem we've got is that potential investors have not bought into the idea of buying into SA. We need to sell the country first. Once they've bought into the country then they start buying into property development.
There is a negative perception about SA overseas relating to crime and instability of Africa. That perception is very strong until someone has actually been to SA and realised it is stable."
Picken says Bulgaria's property market is not nearly as sophisticated as SA's.
"Firstly there is an antiquated deeds office system. There is freehold title but because of the unsophisticated deeds system you are not 100% certain whether you own the land on which the property is being developed. You have to rely on what the developer tells you," he says.
SA has a lot going for it in that it has a sophisticated title deeds system and banks will lend foreigners money, he says.
"In Bulgaria financing is only just coming into the market now and it's very limited. Because of the title deeds system, the banks can't secure financing against the asset."
Picken says SA is on investors' radar screens but "way down" on their lists. Estate agents and developers do not believe in team work, he says. For instance, if two large estate agency brands are at an international convention, they will refuse to have their stands situated anywhere near each other.
But Bulgarians put on property seminars every weekend. "Even those groups competing with each other do them together. They will tell investors what is happening in the market, why people should invest in Bulgaria and various facts and figures about tourism and growth. The biggest draw card is that Bulgaria is joining the European Union in two years."
Picken says last year there was 26% growth in foreign direct investment in SA. That had everything to do with confidence in the political and economic scenario and it could be even higher if SA was marketed properly.
"Once we change the perception of SA, people will want to invest
and this will provide ample opportunity for companies to promote their
own individual products," Picken says.
Article by: Business Day