Johannesburg property – you and your investment

Although the South African property market has seen its fair share of ups and downs, real estate in the Johannesburg property region has seen more prosperity than seems probable. This can be ascribed, in part, to the favourable tax incentives that were put into place by the government in order to boost the flagging real estate market in sixteen major cities throughout the country. Other areas that enjoyed the positive repercussions of this governmental endeavour include the Midrand property-, as well as the Bloemfontein property market.

Another factor that has increased the value of Johannesburg property is the slew of foreign investors that follow in the wake of the 2010 FIFA Soccer World Cup excitement that hold the country firmly in its grip.

This begs the question, with all the other avenues available to them, why do these individuals choose to invest in property per se? When it comes to lucrative investment, private individuals have three viable options – cash, shares or real estate. Cash investments are normally in the form of bonds and constitute a low risk financial endeavour, while shares are high risk but have the potential of yielding very high returns. The value of real estate like Johannesburg property, on the other hand, has routinely doubled every eight to ten years ever since the early 20th century. This means when you invest in property you are looking at a relatively high return with a substantially diminished long term risk.

A further incentive seems to be that when an individual wants to amass capital for further investments they can normally do so quite easily by borrowing against their property, which means the potential value of their real estate gives them the ability to make larger investments with the benefit of an affordable initial expenditure.

The type of Johannesburg property that is most in demand normally conforms to the following characteristics:

1.       Residential: Residential properties represent a lower risk investment, as commercial spaces run the risk of standing empty for long stretches of time. Commercial real estates is also frequently much harder to finance.

2.       Newly constructed: Buying a new property has the advantage of tax concessions for the buyer, which in turn allows them to cover their initial ownership expenditures.

3.       Situated in an area with a solid infrastructure in place: Real estate in high growth areas is in demand due to its proximity to the job market.

Despite dire warnings of a global softening of the real estate market, the South African property sector retains a healthy growth rate. Our country is fast becoming one of the foremost visitor destinations on the continent due to the splendours of our natural landscape, as well as our well-established tourism industry. Where else can globetrotters enjoy a game-viewing safari alongside lush golf courses and award winning wine estates? 

South African property will remain a very solid investment as long as the government continues to bolster the rejuvenation of its big cities. Why not inquire about Johannesburg properties today and get in while it’s hot?