South Africans are queuing to buy property abroad, with innovative fractional ownership schemes fuelling the trend. One top international property group says it is handling a massive 15 calls a week from SA would-be overseas investors.

Fractional ownership schemes — a relatively new model of property investment — are leading the way, allowing purchasers to buy into hotel suites.

Accomodation come investment

Guest Invest, a Sotheby's International Realty London client, offers hotel suites in excellent parts of the city from £341 000. This entitles the purchaser to 52 nights' accommodation a year and through the hotel management programme, a guaranteed rental income of six percent in the first year.

“The concept provides frequent travellers with an easy accommodation option in the centre of London that doubles as a lucrative investment,” says Barak Geffen, executive director of Sotheby's International Realty South Africa.

“London is one of the financial capitals of the world and will always provide excellent business opportunities. It has a stable economy and with an influx of Europeans into the UK in the wake of the European Union, demand for property is increasing. Prices are unlikely to drop in the near future. "

Is it affordable?

UK bond repayments are quite manageable, says Geffen. On average a two-bedroom apartment in an outer lying but good suburb of London will cost around £300 000.

“It’s the deposit that requires a major cash injection and a deposit of 25 percent or more attracts a better interest rate. It is however also possible to get a 100 percent bond with certain UK banks.

Who is buying?

“Although the average age of investors varies, according to our UK branches, the majority of South African’s looking to invest are in the late 20 to early 30 age group and are seeking sectional title properties on the outskirts of London near universities and easily accessible transport routes.

“The majority purchase as a way of diversifying and securing a global investment portfolio,” he says.

“The local calls we get are from buyers looking to purchase around the £250 000 to £2-million mark. These are second home investments that purchasers will generally rent out through an already set up rental scheme,” he explains.


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