South Africa vs Zimbabwe real estate

Local looks undervalued, so why aren't we more optimistic?

It seems like Afro-Pessimism is so yesterday. Much speculation is been made about Africa as a sleeping giant with potential growth and large unreported real economies. What about Saffer-Pessimism - that is surely alive and well.

If there is any truth in reports that the average SA property is R930k and the average Zimbabwe property is R1,5m where does the opportunity really lie?

The reason we aren't all seeing this obvious discrepancy in property values is because of the "the grass is always greener on the other side" syndrome.

After all the isolation Previously Advantaged South Africans are still thoroughly obsessed with investing offshore, despite the last 15 years showing that Local is Lekka! It is weird that the world considers us capable of hosting the World Cup whilst locals spend their lives trying to convince the World we can't.

Now Mugabe might have the flu and everyone thinks that Zimbabwe must surely be the place to buy some property. I wonder what the chances are that Zimbabwe will ever host the World Cup, or how long it will take for any African city to host anything again. South Africa was chosen and instead of celebrating the last four years many have been postulating potential limitations. So why don't South Africans think this way when things look positive here at home?

Never mind the stats; I have a Zimbabwean friend who lives in Rosettenville where the average house is about R500k. In Zimbabwe she has a similar house worth R800k. Some people are so blinded they do not see the irony. Having been fulltime involved with investing the last 16 years I have found that sentiment is actually very powerful.

I met an Irish guy recently who, after an initial brief holiday brought him here, has lived here for 15 years. The most refreshing thing about the conversation was not all the good points he raised about SA, but that after the 30 minutes he had not run down his home country. Rather refreshing.

More mortgage finance for the future

As can be seen by the banks' decisions to grant bonds covering more of a property's value, it only takes one to do it and within two weeks they all do the same.

In the next three years I predict that a bank is going to change to 35 or 40% on a home for someone who spends less than 10% on transportation, a concept the NCA definitely facilitates. When it happens the most interesting thing is not what will happen to the property market but rather how long it will take for the other banks to follow.

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