Foreign Buyers Shaping South Africa’s Property Market

What the Numbers Show

According to Paul Berman, CEO of Berman Brothers Group, about one‑third of the R6 billion worth of deals recorded at the deeds office involve foreign purchasers. Of those foreign deals, roughly 18 % are financed with a South African mortgage bond, while the remaining 82 % are paid in cash.

Myths About Foreign Ownership

Two common myths keep popping up:

• Myth 1: Foreigners aren’t allowed to own property in South Africa.
• Myth 2: Even if they could, no bank would lend them money.

Both are false. The data shows that foreigners do buy property and banks regularly provide mortgages to them.

How Banks Work with Foreign Buyers

Standard Loan Structure

For a foreign applicant on the Atlantic Coast, banks often start with a 50 % deposit and a 50 % mortgage. This ratio is flexible—buyers with strong finances can negotiate a lower down payment, while those with weaker profiles may be asked to put more money down.

What Banks Need

When assessing a foreign buyer, banks look for the same basics they require from any client:

• Proof of income or assets.
• A clear trail showing where the money comes from, verified under the Financial Intelligence Center Act (FICA).
• Confirmation that the funds enter South Africa through an authorized dealer, with the proper South African Reserve Bank records.

These steps make sure that money can flow back out of the country when the property is sold later.

Why a Third of the Market Comes from Abroad

Price Comparison

International buyers don’t compare Sea Point to Stellenbosch; they look at places like Lisbon, Mallorca, the South of France, or coastal California and Florida. In those markets, price per square metre is much higher, so the Atlantic Coast looks like a bargain.

Geography Adds to the Appeal

The coastline is squeezed between Table Mountain and the ocean, with strict heritage and environmental rules limiting new construction. This fixed supply, combined with strong global demand, pushes the foreign‑buyer share up to about one‑third of the market.

Supply Limits and Price Gaps

Because there isn’t a meaningful pipeline of new homes, every sale happens within a limited stock. As more global buyers enter this fixed‑supply corridor, prices stay strong and the share of foreign transactions keeps rising.

Broader Trends Across the Country

Lightstone’s analysis of the last decade shows a similar pattern nationwide:

• Only about 6 % of all residential transactions involved foreign buyers.
• Among homes priced over R20 million, 39 % were bought by foreigners.
• For properties between R10 million and R20 million, the share was 26 %; between R4 million and R10 million it was 15 %.

This means that while foreign investment is a small slice of the overall market, it plays a big role in the luxury segment.

Conclusion

The idea that South Africa shuts out foreign buyers or that banks won’t lend to them doesn’t match the reality shown by the data. A third of the high‑value deals on the Atlantic Coast involve overseas purchasers, most of whom pay cash but a significant minority use local mortgages. Banks have built the processes to serve these clients because the demand is genuine, the assets are solid, and the loans perform well. As long as the coastline’s supply stays limited and international buyers see value, their influence on the market is likely to keep growing.