Estate Agencies welcome clarity on the ban on foreign ownership of land
Category Property news
In his recent State of the Nation address, President Jacob stated that foreigners would be barred from owning land. “It’s important not to allow panic to cloud out the actual technicalities of this proposal, in that it now appears the President was referring to farm land and not residential property,” says Mike Greeff, CEO of Greeff Properties, an exclusive affiliate of Christie’s International Real Estate. Greeff was referring to the comment made by the Minister for Rural Development and Land Reform Gugile Nkwinti on the SABC’s website that said that the government is proposing to ban foreigners from owning “productive land” as opposed to residential property.
“At this stage, it is just a proposal, but should a ban be implemented, current foreign owners of South African land, productive or otherwise, will not be affected, and according to former land minister and current Tourism Minister, Derek Hanekom, existing title deeds were, in terms of existing policy, not under threat and existing land owners would not have to convert their title deeds to leaseholds,” says Greeff. “We’re watching the situation closely and we are aware that South Africa would not be the first to make a distinction between agricultural and urban land, and to disallow actual ownership of productive land, but still allow leasehold,” says Greeff, whose company is linked to 1000 other estate agencies in over 44 countries worldwide by virtue of affiliations with Christie’s International Real Estate. “Interest in South Africa and particularly Cape Town as a destination has been growing and should be cultivated as a priority. It’s so important to send out a clear message when it comes to government policy, particularly when foreign policy is involved. Hopefully this distinction between productive and residential land will clarify the issue and minimise any fall out due to blind panic,” adds Greeff.
“With regard to the current residential market in the Cape Peninsula, selling prices are rising and properties are spending less time being listed before being snapped up, mostly by South African buyers, many of whom are Cape based with a growing number from Gauteng and Kwazulu Natal. Foreigners are in the minority. For the month of January 2015, Propstats figures indicated residential sales to foreigners amounted to 20% on the Atlantic Seaboard, 7.5% in City Bowl, 4.3% in Constantiaberg, 18.5% in Hout Bay, 1.4% in the Southern Suburbs and 3.4% on the Western Seaboard,” says Greeff.
“With regard to the President’s statement that the size of land owned by a South African will be limited to 12 000 hectares, once again, this refers to agricultural land and Nkwinti has been reported as saying that excess land would not be seized by the government, but rather bought from the current owner and then redistributed. This is not an ideal situation in that it does away with the willing-seller-willing-buyer scenario and this is somewhat of a worry since the farmer owning the land has no choice other than to be a willing seller, in spite of plans he might have had to cultivate such land,” says Greeff.
Author: Greeff
