Central London residential price rises could point to big rises in SA property

Property watchers who think that South African residential property rentals tend to track those of the big western cities will be interested to learn that Anne Porter Properties’ London Associates, Knight Frank, report that Central London prices rose 3,2% in February.

“This,” says Lanice Steward, MD of Anne Porter Knight Frank, “was the strongest rate of growth in a single month since August 2007 – a sure sign that conditions are improving at last.” Analysing the Knight Frank London figures, Steward said that these now show a 19% rise off the low point of ten months ago.

“This is, to put it mildly, an amazing recovery,” said Steward.  “Central London prices are now only 10% below the market peak of March 2008 and Knight Frank has shown that the larger houses in the £5 million bracket are now achieving prices at or above those of that peak.”

Liam Bailey, head of residential research at Knight Frank, said that low interest rates and the weak pound had drawn in foreign capital.

“There was a perception which, in my view, was correct, that price falls of up to 24% had created a market unlikely to be found ever again in the UK – or elsewhere,” said Bailey. 

Forty five percent of the buyers of £2 million plus homes, he added, had been foreigners.

Steward commented that, with the right exposure a similar influx of overseas buyers could and should now be taking place in Cape Town, where the recovery has “only just begun” and where, she said, bargains similar to those of London are still achievable.

“There will, of course, always be those who decry the idea of allowing foreigners to own so much as one square metre in our country –but I simply cannot see why this should be so:  the more we sell to foreigners, the more local developers can build replacement products. 

“Can there really be any disadvantages in having ‘swallows’ or retired people coming to Cape Town with their pounds, their dollars or euros?  Any reluctance to accept this source of income seems to me illogical.”

Steward added that conditions for investment in SA are now good – “our average returns, allowing for inflation, are still 3,5% better than those in the developed world”.  However, irresponsible statements by politicians like Malema could dampen enthusiasm for SA as an investment venue.

“It is imperative for every public figure to be aware of the impact their statements can have on the SA economy and therefore on job creation, which, need we remind them, is the only solution to poverty and crime.”

For further information contact Lanice Steward on 021 671 9120 or email lanice@anneporter.co.za.

Article by: www.anneporter.co.za