South Africa has not escaped the global depression and house prices have fallen over the past few years, although that decline does seem to be stabilising. This is good news for those who want to buy a house here but be warned that it remains very difficult to get a mortgage in South Africa without a hefty deposit so you might be better getting a mortgage from a UK bank.
The South African property market welcomes non-nationals and the housing laws that apply to citizens also apply to non-citizens so you are fully protected.
Property Prices in South Africa
The problem with giving median house prices is that this is by no means a fixed figure and with the market fluctuating, this information will likely be out of date in a few years, but it does help to have a general figure when you are considering buying a property.
The average property price therefore, in 2011 was R1,057,825 which in sterling terms is close to £76,000. Very affordable when you compare that with the UK average house price but it is worth bearing in mind that this figure is just an average and that you will find the more exclusive areas of South Africa will have much higher prices. Keep up to date with the South African property transfer guide.
Finding a Property
Obviously the process of buying a house will differ from the UK. In South Africa, estate agents earn much more commission – up to 7.5% of the selling price. This is paid for by the seller.
Make sure that the agents you deal with are members of the Institute of Estate Agents of South Africa (IEASA) which lists reputable agencies. Do bear in mind that agents are working on behalf of the seller and the more they sell a property for, the more commission they get so do your research on similar priced properties in the area. If you are armed with knowledge you are more likely to get a better deal.
Finalising the Deal
The whole process of buying a house can be fairly quick so long as you have your documents in order. The agent will need to see your passport and other proof of ID along with a marriage certificate if you are buying with your partner.
Once the seller agrees to your offer, you will be required to complete an Offer to Purchase which the agent will supply you with. This document is legally binding but do note that the seller can still change their mind up until they sign the agreement.
Once the Offer to Purchase is signed by both parties, the documentation will be forwarded to a solicitor who will deal with the legal side and who will liaise with your mortgage provider.
Paperwork will then go to the Deeds Office for the transfer of ownership which can take up to 2 weeks.
As the buyer you will be eligible for the Transfer Duty and Conveyancing Fees. At the moment you pay transfer fees of 3% on properties valued above R600,000, rising to a maximum of 8% plus R37,000.