South Africa-Emerging Market?

Question

Good day to all

This is my second post, 1st one being my intro hello!

Apologies if this matter has been discussed before but I'm curious to know:
Do the American and European property investor see South Africa as an emerging market?

(To qualify my question. As a 43 year old South African I see our beautiful country as a mixture of 1st and 3rd world. We have infrastructure in our major cities equal and better that in most countries in the world. Currently we are preparing for the World Cup Soccer in 2010. Our banks are perhaps better of than most European and American banks at his moment, and 15 years post apartheid era, our country is still growing strong, despite the usual politics and issues a young democracy may suffer. We have beautiful and clean beaches, abundant wildlife(and NO, they do not roam around loose in our streets!)  )

My second questions is, do you or have you ever thought of investing in real estate in South Africa, especially with the strong Dollar/Euro/Pound to the Rand?

Hope it make sense, and I'd love to hear your comments!

Cheers

Fritz

Jon Holdman · Answer

Agree. There are many countries in Africa with widely varying political and economic conditions.

Brennan Carey · Answer

Thats why its dangerous to generalise especially when you dont know the subject matter..

Fritz Coetzer · Answer

Good morning all (10:00 in SA)

Thank you all for you comments and views!

Indeed we are living in interesting times, no matter where you call home at this moment in time!

I must admit that I'm unashamedly biased towards my own country...warts and all! I also believe people in glass houses should not throw stones....simply meaning every country has its own internal issues and they should not necessarily single out South Africa. I do understand that certain or most parts of  Africa does have serious issues.....and I only discuss those issues when I braai (or barbeque as our American friends call it) and enjoying some beer!

As I own my own property business, I do at least 3-6 deals with foreigners each month, mostly from the UK, Australia and other African countries....surprisingly never anyone from the US!

Jon, I would like to invite you personally to visit our country, you would be surprised how different it is from what you see and read in papers and TV! Personally I usually take papers like "The Economist" with a pinch of salt! Perhaps they are overly negative but rather uninformed I would say......

If any of you need info on South Africa, just say the word and I will send some unbiased stuff....promise!

I would appreciate any views that any other forum member might have on South Africa, good or bad....maybe we all just might learn from each other.

Have a great day!

Fritz

Brennan Carey · Answer

Jon,

Would you/ do you invest in areas similar to California and Vegas?  And if so would you seek out the better end properties in those areas? For me these areas have run hard and will be taking a hit for some time..

I ask this because I see the long term buy to let type properties in any market being the basic entry level stuff where there is a large tenant pool.

No glitz and glamor in land lording, so in that vein Paris may be a bit too glamorous.

My thoughts are that the "so called" developed countries will continue to take a knock whilst the emerging markets will rise especially China.

On a politically based slant, I take the view that Obama and the USA may have more than its own fair share of political issues that could rival most African countries given whats going on with regards to the economy.

But at the end of the day its all about perspective and sentiment. Strange times.... Indeed !

James Hiddle · Answer

I refuse to do business in any part of Africa do to the scams going on.

Not saying there are any in SA but there are a bunch in Nigeria and the surrounding countries so I just made it a rule I will not do any business all over there period.

Ralph S. · Answer

Fritz - you still out there?

The idea of international money wires, dealing with exchange rates, foreign taxes, ownership in foreign companies and the like gives me the willies.

I don't think you're going to find a lot of interest or support for the idea.

If you're interest is financing or equity stakes in SA, I would think finding international investors would come first, people familiar and comfortable with doing all that is necessary, then find those willing to back you in real estate ventures would come second.

Jon Holdman · Answer

Well, if I bought a flat in Paris it would be for my personal use, not as a rental.  No idea what the rental market is like there.  Not that this is anywhere near a reality for me anytime soon, or probably ever.

No, I don't invest in CA or LV.  There may well be places there where you could have profitable rentals now, though.  If I was seriously looking outside Denver, I'd look at places like Dallas, Houston, Kansas City or other cities in the center of the country.

I just see no need to go outside the country.  It would totally be a hands off business, unlike any place in the US.  I could fly anywhere with a four hour flight, most less.  I'm sure South Africa is at least two eight hour flights, just like the ones I used to do to Bangalore.  May be great money makers, just too far away.

I think you're right that there are political issues in the US just as in these other countries.  The chances of a shooting coup are MUCH lower here than in the developing countries.  The chances of having property nationalized are much lower.

Jon Holdman · Answer

Hi Fritz, welcome to BiggerPockets.com.

Personally I invest just in the area where I live.  I know others invest further away, and I've considered that.  But on a different continent?  Well, maybe in a flat in Paris, but not South Africa.

My perception, almost certainly limited, is that South Africa has some serious political issues.  "Issues of a young democracy" is putting it lightly.  But "The Economist" is my main source of information about South Africa, and perhaps they're overly negative.