Tuesday, August 18, 2009

Got cash? Mauritius awaits

Really? Mauritius is the best option? I would squirrel my nuts in places like Canada, Australia or New Zealand, you know fer sure no unexpected coups d'├ętats as is so frequent in Africa but maybe Mauritius is different. Let's just say it's an option, better than most. And I wager it's just the tip of the iceberg. There must be hundreds of billions tucked away outside South Africa not being put to use. For South Africa's benefit that is. Which is incredible that 15 years into a so-called new democracy people still have no idea where the country is heading (although the signs are pointing in one direction) and certainly no confidence. As they say, money talks, bullshit walks. The money's saying ciao.

Rands for dollars and residency for free

Mauritius plays well to South African fears.

What is it about Mauritian property that is attracting the attention of SA investors more than any other investor? The answer is easy - it is a way to get your money out the country and gives you an insurance policy if South Africa follows Zimbabwe's example.

When Villa Valriche, the luxury Mauritius development aimed at foreign investors, came to market a few years ago, the sales team expected the South African market to make up about 15% of sales. Today, with the first phase nearly sold out, around 60% have been bought up by wealthy South Africans. Which explains why the Mauritian developers, ENL Property have launched their latest offering, La Balise Marina, only in South Africa.

Of the 100 odd units that have been sold in Villa Valriche, only two are up for re-sale which tells us that Mauritian property has not attracted the "get rich quick with a 10% deposit" speculator that resulted in the boom and bust of South Africa's local golf estates. The Mauritian property market it seems is attracting the serious investor, the ones who can pay anything from US$700 000 - in cash.

Rod Hudson, MD of Hayes, Matkovich and Associates the development's promoters, says that because Mauritius forms part of SADC, South Africans wanting to purchase property in Mauritius are not subject to the R2m foreign investment allowance - this investors find irresistible. South Africans can therefore invest in a hard currency asset which, unlike property markets all over the world, has not seen any depreciation over the period of the credit crunch. Investors who have re-sold units in similar developments in Mauritius have seen returns of around 40% per annum - in US dollars.

There is a bit of a catch on the foreign exchange however, because if you sell the property and do not re-invest, it is understood that the capital would have to be repatriated. Hudson says that although so far there are no test cases, there is a possibility that only the principle capital would have to be brought back and any profit could remain abroad.

Apart from the hard currency offering, the residency offer is also proving irresistible. Villa Valriche and La Balise Marina, along with a handful of other developments fall under the Mauritian government's International Residency Scheme (IRS) which gives foreigners investing in these developments automatic residency. It is perhaps no co-incidence that the South African sales in these properties started to peak around the time of Polokwane, the Eskom blackouts and the complete collapse of Zimbabwe. It seems South Africans would happily swop crime for an island lifestyle even if it does come with cyclones.

Source: Moneyweb

1 Opinion(s):

Anonymous said...

South Africa is sinking in a shithole. Mauritius is sinking into the ocean. Same result - disaster. The Comores is looking at buying land in India to move too and start their new country. Makes me wonder why the Afrikaners don't go to Zim and buy a country too.