Seeff explores real estate trends and growth opportunities on the African continent

Source: Supplied. Samuel Seeff, chairman of Seeff Property Group.

What are some of the key trends you have observed in the South African property market over the past few years? How do you think these trends will shape the future of the industry?

• Moving abroad The quest for a better lifestyle and better local services has become a huge trend, sparked by the pandemic lockdown, with people suddenly realising they need more than just a commute in their daily lives.
• Rediscover the countryside and the seasideProperty demand is recovering in many small towns.
• The growth of hybrid working models This means people are looking for spaces to work from home so they only have to commute for part of the work week.







• Accelerating urbanization With the influx of people seeking economic opportunities into cities, this has put a huge pressure on affordable housing, and because the government has not taken action, it has lagged far behind in developing affordable housing. This situation is likely to continue, and there are many opportunities for private developers to come in and fill this gap, but they need government funds.
• Lack of maintenance and infrastructure This is another major flaw in the real estate industry.

South Africa is often a bellwether for real estate trends in the region. In what ways do you think South African real estate trends influence or deviate from trends in other African countries?

South Africa has by far the most advanced and active real estate market, with transaction volumes far higher than those in the Southern African Development Community. South Africa is also leading the way in mixed-use developments and real estate to meet the growing needs of cities.

Namibia is similar to South Africa, with the same interest rates and very similar house prices. The same is true for Botswana, but the SADC property markets are still much smaller than South Africa, but they are developing.

For example, residential real estate in Zimbabwe is driven primarily by expatriates, who face high interest rates and challenges getting home loans, meaning buyers need to have cash on hand, and because of the weak economy, most expatriates can afford to buy, while locals mostly rent.

In contrast, South Africa’s property market is more accessible, even for first-time buyers. Banks still offer loans of up to 100% (including costs, with some banks going as high as 105%), house prices remain flat, and the government offers additional assistance in the form of FLISP (Financial Linked Individual Subsidy Scheme) for those earning between R3,501 and R15,000 a month.

According to Siv’s branch in SADC, demand for commercial real estate is strong as development continues and the economy expands and transforms.

What opportunities do you see for real estate investment and development in Africa, particularly outside of South Africa? Affordable housing is a huge gap not only in South Africa but also in the SADC countries, which presents opportunities for developers and this is happening in many regions despite the challenges in providing low-cost housing.

There is also a growing demand for mixed-use developments and properties where people can enjoy a relatively safe lifestyle with amenities such as swimming pools, children’s playgrounds, and open spaces for cycling or hiking.

How important is sustainability and environmental awareness in the African real estate industry? What innovative approaches have you seen in this regard? The practice is growing and is likely to increase in the coming years, but as we have seen in South Africa, this is often out of necessity, such as the move to solar energy due to the Eskom energy crisis.

Many estates and new developments now incorporate elements of sustainability, which benefits future growth and development.

Affordable housing is a critical issue across Africa. What strategies do you think will be most effective in addressing the affordable housing shortage? How can the private sector contribute to these efforts? This is a question better suited for developers, but we do see strong demand for mixed-use developments.

We may see cities densify to take advantage of existing infrastructure (water, electricity, sewerage etc.) Cape Town is a good example where regular residential properties can be built and rezoned to strata titles.

What role do you think government policy plays in shaping the African real estate sector, and what policy changes or reforms would you like to see to support further growth and development?

Governments play an important role in legislation and taxation, such as property taxes such as transfer taxes and capital gains taxes, both of which can be a disincentive to markets, and promoting the protection of private property is essential to promoting economic prosperity.

It also plays a key role in formulating economic policies and developing and maintaining the critical infrastructure required for economic growth, which in turn promotes and unlocks real estate growth potential.

Are there any emerging markets or sectors within the African real estate space that you think are particularly promising for investors or developers?

South Africa offers great opportunities for affordable housing and densification, but there are also many opportunities in neighboring countries.

The SADC countries are expected to grow and develop in the coming years, which will naturally provide a lot of opportunities for developers.

Africa’s urban population is expected to double by 2050. How do you think this demographic shift will impact real estate demand and development patterns across the continent?

It is widely expected that massive urbanization will occur; we are already seeing people flocking to cities in search of economic opportunity. Housing will be in high demand, and more compact living spaces, more mixed-use apartment buildings, and better public transportation will likely be needed, as commuting will become even more challenging than it is today.

Collaboration between the public and private sectors is often critical to the success of real estate projects in Africa. Can you share some examples of successful partnerships or initiatives that have had a positive impact on the communities they serve?

By the early 21st century, Cape Town’s central business district was run-down and the success story we see today is a direct result of futuristic thinking and public-private partnerships, with the private sector coming in and developing the city. It also saw the rise of CCID (Cape Town Central City Improvement District), also a privately funded initiative that provides complementary services such as cleaning, safety and security. The initiative was subsequently expanded to many other areas, such as the Cape.

As we celebrate Africa Month, what message do you have for real estate professionals or entrepreneurs who want to contribute to the development of the African continent through the real estate industry?

The real estate sector (both residential and commercial) is a significant economic contributor and also has a significant economic multiplier effect in terms of stimulating a value chain that generates economic benefits and job creation. The real estate sector should be welcomed and seen as an engine of growth but an enabling environment in terms of legislation is needed to allow the private sector to do what they do best, which is to develop and grow.

South Africa can become a continental leader in this regard, setting an example for neighboring SADC countries. That being said, for this to happen, a good economic environment must become a priority here and elsewhere.