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Despite – or, more to the point, because of – the massive disruptions of the COVID-19 pandemic, South Africans continue to invest in residential investment properties overseas. With the prospect of a booming economy and the promise of citizenship, the United States is becoming one of the most sought-after destinations.
Increased demand
‘It would appear that the lockdown experienced due to COVID-19 has given family units and individuals time to reconsider their career paths in conjunction with immigration options,’ says Dr Andrew Golding, chief executive of the Pam Golding Property group.
‘As a result, we’ve noticed an increased demand from millennials who are looking at immigration coupled with business and career advancement, with the USA being an obvious choice for many.’
The benefits (and, of course, risks) of owning a fixed property offshore are well known, and there’s no need to rehash them here. What’s worth reiterating, though, is that if you’re planning on emigrating in the future, and if you can afford the investment, it does make sense to buy property overseas.
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Popular investment destinations for South Africans tend to include places like Portugal , Mauritius (because of its excellent options and welcoming Saffer expat community), Cyprus ( because it has it all…. location, location and location) and the United States.
Covid recovery
The USA is on the cusp of what looks like a massive post-pandemic growth run, fuelled by a faster-than-expected COVID-19 vaccine rollout, and newly elected President Joe Biden’s eye-watering economic stimulus package. In April 2021 the International Monetary Fund (IMF) said that it expects the US economy to surpass its pre-pandemic size, with growth reaching 6.4% during the course of the year. According to CNN, those estimates are broadly in line with Wall Street’s expectations.
That would make it the fastest annual growth rate in the USA since 1984, when Ronald Reagan was president and Bruce Springsteen was tearing up the pop charts with ‘Born in the USA’.
‘At $1.9 trillion, the Biden administration’s new fiscal package is expected to deliver a strong boost to growth in the United States in 2021 and provide sizable positive spill-overs to trading partners,’ the IMF report stated. It added that the ‘unprecedented policy response’ to the pandemic means that the COVID-19 recession is ‘likely to leave smaller scars than the 2008 global financial crisis.’
Investment visas
For South Africans who’re looking at a delayed vaccine rollout and another tough year in the local economy, the grass in America is looking especially green right now. For South Africans with money, buying US property is easier than you might think.
Speaking at a recent Estate Living webinar on US emigration, Stuart Ferguson Director of 12 Star Capital, noted how business and property investment opportunities makes the country attractive.
And accessible, if you have the means. The US government offers a permanent residency programme called the EB-5 Immigrant Investor Program, which aims to stimulate the US economy through job creation and capital investment while offering foreign investors (and their spouses and kids) a Green Card and citizenship.
Unlike other visas, the EB-5 is not restrictive, the programme enables you to live anywhere in the United States of America. The only thing one cannot do is vote until the citizenship application process is complete.
The cost of entry is a capital investment of $900,000 (about R13.2 million, after a recent increase from previous levels of $500,000), either as cash, bank loans or family contributions. Your capital is protected in an active investment, so you get the lump sum, plus interest, back after five years; and you can move to the USA on approval. After that, it can take up to five years to get US citizenship.
On the move
Ferguson notes that South African EB-5 applicants tend to be high net-worth individuals, or families who are willing to assist their children in looking at immigration options.
He adds that the one of the popular destinations for South Africans buying property in the USA right now are the states of Florida, through projects like Hollywood Circle, City of Floria.
Although the pandemic has impacted on investors ability to travel to the USA for now, with the a 2 year application process and the number of virtual tools available to view developments with investment opportunities , 12 Star Capital has continued to seen a notable number of application for the USA EB-5 programme.
