Selling Africa to non-Africans is becoming an institution. At exhibitions, shopping malls and estate agencies across Europe, people are buying up the South African coast.
Over the past two years European real estate operators have moved into and, in many cases, taken over the market on South Africa’s coasts. Local residents find themselves increasingly priced out and irritated by Europeans seeking “Africa” and a quality beach house, while high-ranking government officials told the Mail & Guardian a moratorium on foreign property purchases could be in the works.
“It used to be so lovely here, like on a farm,” said Rudolf Rode, long-time native of Camps Bay in Cape Town
Rode lives on a small plot overgrown with indigenous trees and flowers he proudly planted. His home has more windows than walls, and sitting in the living room one has a stunning view of both the Table Mountain summit above and the coastline below.
His abode is a humble one compared with the ostentatious estates popping up around him, including a mammoth mansion “taking away a big slice of our view of the beach”.
Rode’s suburb is a prime target of Ocean Estates International, a European company set up in South Africa less than a year ago to lure foreigners to the country on “property safaris”.
Clients are wined and dined in high-class hotels and chauffeured in luxury cars to huge Cape Town estates, golf course villages and beach-side dwellings in KwaZulu-Natal going for anywhere between R500 000 and R25-million. Homes have cherry-wood floors, porcelain tiles, wool carpets. A pool is a must.
Michael Jackson, David Beckham and Whitney Houston, among other celebrities, are rumoured to be buying hot spots in Cape Town and on the KwaZulu-Natal north coast.
The offices of Ocean Estates closely mirror those of a lavish European investment bank, with decorative displays, large glass window offices, stunning views and too many employees to meet in one visit.
“They were brilliant, very hospitable,” said Mary Lou Prentice, a potential British buyer. “They made it exciting.” Owners of their own company in Britain, the Prentices are touring the world inspecting property in Spain, Greece, Florida and South Africa, with R3,5-million at their disposal.
For the Prentices, South Africa is attractive both for its lifestyle and climate and as a sound financial investment. “They like the diversity and cosmopolitan atmosphere, the accessible nature, our cuisine, friendly people, celebrities, the film industry,” said Marion Taylor, founding partner of Engel & Völkers, another sizeable European agency newly opened in South Africa.
Both companies say overseas buyers generally have no connection with South Africa, and about half who buy through the companies are visiting for the first time. “South Africa is now a global destination, on a par with the Caribbean, Florida and the south of France,” said Ocean Estates manager Mark Feuilherade.
What of South Africa’s alleged image as crime-ridden, unstable and corrupt? “People just like the fact that it’s not crowded like Europe,” said Taylor. Foreigners had been increasingly attracted to South Africa after the September 11 2001 terror attacks as a refuge from a troubled world.
There have been repeated reports that the African National Congress government is planning to regulate property acquisitions by foreigners, but real estate agents shrug it off. “There has been talk, but they love the foreign investment and interest,” said Taylor.
The Minister of Housing, Brigitte Mabandla, told the M&G “people are not aware of the extent of this particular phenomenon”. According to Mabandla, she and other government officials see “a need for regulation for the common good”.
“We need to revisit the issue of how we look at property in this country,” she added. “It’s not like saying we welcome investment at all costs. It’s a very new and serious concern for me. I think that we need to call for a moratorium on this type of purchasing.”
Also up in arms is the Landless People’s Movement (LPM), which has launched a “national campaign to save the South African coasts”, informing people of the issue and calling for a freeze on European property acquisitions.
“These Europeans come in with their big money, sell our land back to Europeans, and keep the profit. It’s not right,” said Randall Rossouw, LPM leader in the Western Cape.
The LPM is organising small Western and Eastern Cape farmers to press restitution claims on disputed coastal lands.
Rossouw said the movement had tabled proposals to the government on “how we can jointly manage the land for many people”.
Despite the threats, the property firms continue to thrive. Engel & Völkers came to Camps Bay in late 2002. According to Taylor, in less than three months it had a 50% market share in the area and it is now opening its 18th branch.
Ocean Estates is so successful that Europeans who have never visited are buying prime South African land “site unseen”.
Such “non-emotional” acquisitions already represent 20% of Ocean Estates’ sales, and they are growing.
The agency sends agents speaking 29 different languages to 350 exhibitions a year across the world, selling South African property.
Safari leaders sell the property as a multi-value product. “We offer European buyers a beach house with space and fantastic investment returns,” said Feuilherade. “For the same money in London they’d be lucky to find a small studio flat.”
One effect has been skyrocketing property values. According to Taylor “coastal property has doubled in price over the past three years”.
This comes against the background of significant general increase in the prices of residential property in South Africa over the past four years, which economists expect to continue.
There has been a “recent home-buying frenzy,” wrote Dirk de Vynck, a leading South African property economist, in a recent report.
He added that on average the prices of houses are still growing by in excess of 10% a year.
Over the past summer South Africa experienced its highest increase in house prices since 1981.
Estate agents dismiss concerns that Europeans are pricing South Africans out of the market. “Lots of South Africans own property, trade in the same market and make money through the rise in property values,” said Taylor. “South Africans welcome the outside interest because we were isolated for so long. What’s happened since the ANC took over is so exciting — we’re on the world map again.”
While the LPM describes the foreign buying wave as “neo-colonialist”, buyers see themselves as investing in a sunny refuge which happens to be in Africa. “Europeans are bemused by how First World we are,” said Feuilherade. Rode agrees: “It’s little Europe, except for the flowers.”
Critics complain that Europeans are keeping the coasts out of reach of black South Africans and allowing a “little Europe” to be built on the tip of the continent.
The companies said that, in general, there was a lack of interest among black buyers in the top end of the coastal market. “Black South Africans like a lot of land and have more traditional values, so we don’t sell much on the seaboard,” said Taylor.
Rode is more irritated by Europeans’ taste and lifestyle than by their right to buy land. “Their houses stick out like sore thumbs, just glass and plastic,” he laments. “Foreigners don’t know the difference between a protea and an invasive acacia. That really annoys me.”