CHAPTER TWENTY-SEVEN: Property Investing in South Africa

South Africa is a country with a breathtaking natural landscape and vast opportunities for adventure, either through safari, mountain walking or city or beach life. The natural terrain varies from savannah to snow-covered mountains, forests to swamps, endless beaches and peaceful rivers to bustling cities and towns. There is plenty to explore: Cape Town; Robben Island, where Nelson Mandela was imprisoned; the cradle of humankind (near Johannesburg); the Kruger National Park; Table Mountain; and the Garden Route, 600 km of coastline between Cape Town and the Tsitsikamma Forest. The country has gone through impressive changes over the last ten years, and has opened up to the tourist industry in a big way.

Economically, South Africa is considered to be an emerging market with an abundant supply of natural resources. The financial, legal, communications, energy and transport sectors are well-developed, and the country has a modern infrastructure. However, growth has not been strong enough to substantially lower South Africa’s high unemployment rate (which was at 25.2% in 2005), and the economic problems from the apartheid era remain serious, especially regarding poverty and a lack of economic empowerment among disadvantaged groups. Economic policy is currently focusing on targeting inflation and liberalizing trade, with the aim of increasing job growth and household income. GDP growth in 2005 was 4.5%, up from 2.8% in 2003 and 3.7% in 2004, while inflation stood at 4.6%. This improvement is steady, and the country is showing good potential for the future.

On the back of this growth…