According to data registered at the Deeds Office, one-third of the six billion transactions in the Cape Town property market on the Atlantic Coast were conducted by foreign buyers. Paul Berman, CEO of Berman Brothers Group, stated that this is not an estimate but a recorded figure.
Financing Transactions
Of all these overseas purchases, 18% are financed through South African mortgages. The company emphasizes that banks are not just open to lending to foreigners but are actively involved in structuring such deals. Berman asserts that the myth that the Atlantic Coast does not accept foreign buyers is false; on the contrary, the market has been significantly shaped by them quarter after quarter.
Debunking Ownership Myths
In the opinion of the real estate development group, the common myth consists of two parts: firstly, that foreigners are prohibited from owning property in this region, and secondly, that banks will refuse them financing. Both statements are incorrect, and factual data refutes the rumors. Berman points out that among foreign buyers on the Atlantic Coast, eighty-two percent pay for the purchase in cash, while only 18% take out a South African loan.
He explains that the dominance of cash is not due to the unavailability of credit but because buyers in this segment often do not need it. For example, an individual moving capital from London or Zurich to purchase a 120 square meter apartment in Sea Point often views a loan as a balance structuring tool rather than a necessity. They use credit when it aligns with their tax position, currency forecast, or cash flow plan, and forgo it when it does not.
Bank Requirements for Foreign Applicants
The standard mortgage structure for a foreign applicant on the Atlantic Coast is 50% equity and 50% mortgage. However, this is not a rigid rule but a starting point that banks adjust based on the applicant's financial standing. A buyer with higher liquidity and clear documentation can negotiate a smaller down payment, whereas a buyer with a less transparent profile may be required to provide more.
Berman insists that foreigners undoubtedly meet the requirements for obtaining mortgages, and banks show high willingness towards them. South African banks have developed a credit appetite, FICA workflows, and cross-border verification procedures for underwriting foreign applicants. This is because the pool of applicants is real, the asset class is sound, and the loan portfolio shows good results.
The group notes that the banks' readiness is not a courtesy but a repeatedly made commercial decision. The bank requires the foreign applicant to provide the same as any other, plus two additional elements: documented income or wealth, and proof of the clean source of funds, verified under Anti-Money Laundering legislation. Furthermore, the funds must enter South Africa through an authorized dealer, which is recorded by the South African Reserve Bank. This last step is important as it allows capital and future proceeds to leave the country upon resale.
Reasons for the Rise in Foreign Buyer Share
The developer indicates that a buyer from Munich, Geneva, Dubai, or New York compares Sea Point not to Stellenbosch, but to Lisbon, Mallorca, Southern France, as well as coastal areas of California and Florida that have a similar scale and climate. Against this comparison, the price per square meter on the Atlantic Coast is in a completely different price segment. This difference is the reason for attracting buyers.
The CEO explains that this leads to the one-third figure, and it is not a cyclical anomaly spike. He believes this happens when the coastline becomes globally priced, and the global buyer realizes that local buyers acquired it at a much lower price. Geographical constraints amplify this effect: the Atlantic Coast is bounded by Table Mountain on one side and the ocean on the other, with strict environmental and heritage regulations in place between them.
Lack of Market Supply
According to Berman, there is no significant supply channel. Every transaction falls within a fixed volume, confirming the structural argument of geographical, rather than cyclical, shortage applied to international demand. The influx of a larger global pool of buyers into a corridor with fixed supply eventually leads to one result.
Lightstone analysis showed that the percentage of residential transactions in South Africa over the last ten years conducted by a natural person born outside the country accounted for a certain share. When analyzing only natural persons (excluding companies and trusts), it was found that foreign buyers constituted 15% of transactions for properties valued between 4 and 10 million rand, 26% for those between 10 and 20 million rand, and 39% for properties valued over 20 million rand. This means that two out of five homes worth over 20 million rand were purchased by foreign buyers.
Despite the common belief, foreign investments were not limited only to the upper price segment and did not restrict themselves to the Western Cape. Analysis at the suburb level revealed various patterns. A Lightstone study from 2016 to 2025 showed that over 2.2 million purchases by individuals, or 94%, were made by buyers born in South Africa. Additionally, 77,902 transactions, or 3%, were made by South African citizens born abroad, and another 71,977 transactions, or 3%, were classified as foreign purchases.
Foreign buyers accounted for less than one-third of transactions valued below 1 million rand, but their share sharply increased with each price range, becoming particularly noticeable above 4 million rand. Lan van Yarsweld, a real estate specialist at Meridian Realty, noted that over the last decade, 6% of residential transactions in South Africa were conducted by foreign buyers, demonstrating interesting market trends.
