sa land not for foreign buyers
04 September 2008

Thozi Gwanya, the director-general for the department of land affairs, says a policy which regulates ownership of land by non-South Africans is currently being developed and is necessary in the interest of sustainable development.

"The report indicated that stronger foreign currencies (forex) enable foreigners to buy more land, including land that is strategically situated such as coastal and agricultural land," says Gwanya.  "It recommended a moratorium on the sale of state land to foreigners. It further recommended that land is leased to foreigners, as opposed to full ownership."

The policy is still in the development stage, but the department is taking advice from legislation from many developed and developing countries. Gwanya says the department is also reacting on guidance from the public.   "Many South Africans have made a call to the government to protect its citizens and natural resources before they are exploited and plundered for non-South Africans."

It is unlikely that legislation of this kind will negatively influence foreigners who currently own South African property. "It is hoped that legislation will not be retrospective, and therefore the current landowners may not be affected," says Gwanya. And, according to him, current debates are that long-term leases are recognised by banks, thus the issue of ownership will not have a negative effect on investment.

Erwin Rode, a property strategist of Rode & Associates, says that such legislation is unlikely to have a wide-spread negative effect on the property market.
"It will be bad in isolated circumstances only, such as at the Atlantic Seaboard where a significant percentage of property is owned by foreigners. It might also negatively influence the Winelands, where many foreigners buy a lifestyle, not just property."

According to Gwanya one of the resolutions of the ANC's 52nd Conference was to give policy direction in regard to land ownership. He says there is consensus on the direction to take, as the July 2005 Land Summit resolution also pronounced on ownership of land by foreigners. Once finalised, will be made available for public debate, where after it will be referred to parliament together with the draft legislation.

Jana Roos, www.fin24.com