New Breed of Buyers Emerges - 04-21-09

April 21 - As the South African property market experiences extreme changes compared to a few years ago, another breed of buyers is emerging.

Young Black investors, who have the cash to spare, are seeking opportunities to purchase properties - usually off plan - in a bid to benefit from the slump in the market and, hopefully, 'make a killing'.

There are generally two types of buyers in this new breed, according to analysts. The first are those who have benefited immensely from Affirmative Action and BEE deals and thus have the means - and the drive - to invest in property.

In many cases, these buyers are able to obtain funding from the banks because they can come up with deposits, however inflated, demanded by the financial institutions. Yet, other buyers have enough money to buy the properties without even turning to the banks.

Another type of buyer is the taxi or shebeen owner who comes to the investment market with very little knowledge, yet wants to get a piece of the action. Real estate agents have been known to run unique workshops for these types of buyers in a bid to educate them more about entering the property market.

In some cases, these types of buyers will pool their funds in order to purchase property, believing that their money is more secure in an investment venture than tied up in the bank.

One example of an area seeing investment by the new breed of buyers is Boksburg, where, according to Redcon Property Developments, fifty percent of the buyers of off plan properties are young black males who have the means to get into the market.

The Gautrain has also played a big part in the revival of areas such as Boksburg.

Foreigners from Ghana and Nigeria make up about 10% of property sales in these areas.