Coface, the international credit insurer, says in its real estate review, that the sector is likely to only experience marginal levels of growth in 2013. On the positive side, says Coface, there are large shortages of residential properties in the major cities due to the massive influx of people from rural areas.

But the industry remains under threat because South Africans continue to be highly indebted, affecting the purchasing ability and eligibility to obtain mortgages.

In addition, business confidence is low which does not bode well for commercial property purchases and rentals.

No government permission is needed for foreign investors to own property in South Africa, however depending on the size of the transaction as well as the funding source, authorisation from the competition commission as well as exchange authorisation in some cases may be required.

Government currently has appointed a committee to investigate whether restrictions on foreign ownership is desirable. This is based on complaints that foreign investment is causing property to become out of reach of ordinary South Africans.

An example are the high prices of beachfront property which are often owned by foreigners. Government is investigating a possible model in which the community will need to give their approval before the sale can go through. No legislation has been proposed yet.

The industry went through a boom period between 2000 and 2006 where property prices rose around 20% annually. But the financial crises, that began in 2008, saw investment in property decline as prices dropped and the industry has stagnated since. On average the South African property cycle peaks every 10 years and there is a construction boom every 20 years.