Living in property la-la land

As a follow up to a previous post, Politics and the Property Market, here's why foreign real estate buyers won't come to South Africa's rescue this festive season - too many scare stories from afar.

Do you reckon the weak rand and falling property prices are likely to make South Africa look more attractive to well-heeled foreign residential property buyers? Not this time, it seems.

The TimesOnline says, in "South African Sun loses its Shine", that more and more British expats and South Africans with British passports are returning home and repatriating funds as political and economic fears start to become reality.

Currency specialist Caxton FX has reported a 22% increase in the number of South Africans repatriating funds to the UK in August and September, it says, and year-on-year, the figures are even more striking.

It attributes news of a 210% increase in the number of clients moving funds out of the South African rand and back to the UK in the past year to James Hickman, of Caxton FX. And quotes Robert Bailey, a property search agent in London, saying he has seen a significant increase in the number of clients coming to the UK from South Africa. "People are pessimistic about the situation there, especially when it comes to personal safety," he says. "I have seen a lot of people deciding to sell up their holiday homes there, too."

This is in spite of advice to the contrary. Bruce Borrie, head of the foreign exchange desk at Baydonhill, the exchange and overseas mortgages specialist, told TimesOnline that now is a terrible time to sell up and repatriate money from South Africa. "The rand is at multi-year lows and so the buying power from rand to sterling ... well, in a word there is none.".

TimesOnline also threw in the usual dose of South African property optimism. "The pound is incredibly strong against the rand at the moment," it quoted Keith Stewart, the chairman of Pezula, the luxury property developer, as saying. "Now is a great time for Brits to buy in South Africa." Pezula is selling 5,000 sq ft plots of land on its Private Estate development in Knysna, on the Garden Route, for R1,37m (£90,000), adds TimesOnline.

Meanwhile, London's The Telegraph lists South Africa among the world's 20 most dangerous places in a travel guide. Number four after Iraq, Afghanistan and Chechnya, the publication says: "South Africa suffers from a high level of violent crime, including rape and murder, although most visits to the country are trouble-free as the majority of cases occur in townships and areas away from tourist destinations. Robberies and car-jackings at gunpoint are increasingly common."

Zimbabwe was much lower on the list of scary places to visit. About fifth from the bottom, Zimbabwe "remains unpredictable, with ongoing political uncertainty and numerous politically motivated attacks across the country".

Who needs foreigners, when we can do things ourselves?
It's not just foreigners who are running scared. Locals are doing a good job of scaring off fresh foreign property investors, too. The International Herald Tribune ran a headline "Despite jobs scarce abroad South Africans move away" on Monday. According to the Reuters report it carried, advertising executive Penny Holt was also leaving because of crime and a murky political climate with a robbery at home the final straw. The news service rattled off a string of names of business players who are emigrating, or have done so recently.