Land and Agriculture Minister Thoko Didiza told Business Times she did not intend to tamper with the existing rights of foreign property owners in South Africa but said the government might consider future restrictions on foreigners owning land in specified areas.

She expected an interim report within two weeks from a panel she appointed last year to examine and advise on the social and economic impact of foreign purchases.

Economists warned that any restraint on free market forces in the property industry could undermine investor confidence and property values.

In an analysis for Business Times, business solutions company Strategis, which monitors weekly property sales, calculated that there were 429500 total sales in South Africa in the year to February, valued at R193.9-billion.

Didiza said the abysmal state of the national deeds register had caused the panel, headed by legal academic Shadrack Ghutto, to miss the original March deadline for its first report.

The minister said that she now expected initial findings by mid-April and a final report with policy recommendations in the second half of the year.

Property agents and non-SA land owners had been concerned since the panel was appointed last June that the government might convert foreign-owned freehold rights into long-term leasehold contracts.

It is something we would need to look at, but I don't think we will do that. That is not what we want to do, she said.

It might be an issue that, going forward, maybe in some protected areas, you might have to go for 99-year leasehold rather than outright ownership, but you might also need to make certain adjustments in order to attract investment in the productive economy.

Didiza said the government had to balance the competing interests of equitable land distribution with the need to attract investment.

She faced allegations within the ANC that foreign buyers were pushing land prices out of range of black citizens who were trying to get into the market for the first time.

In Parliament this week, Land and Agriculture Committee chairman Neo Masithela urged Didiza to act quickly to slow foreign purchases.

Absa senior economist Jacques du Toit said restrictions would affect the market, but probably not very significantly.

He said the rate of increase in property prices had slowed from 34.2% in the year to December to 26.9% in the year to March.

The strong rand has had an effect on foreign buyers, but South African land is still cheap by international standards, he said.

Economic analysts argued after Didiza appointed the panel last year that any steps to curb foreign property purchases would undermine confidence in the economy.

Didiza said public hearings and industry and community submissions confirmed that foreign purchases were accelerating.

But it was still too soon to say whether that was a problem at all and, if so, whether it affected productive, residential or leisure properties.

Initial indications were that the government would need to review and revise the deeds register to show which property owners in the former homelands were foreigners and to ensure that future trades reflected the citizenship of a buyer.

Though Masithela had urged her to create a register that showed the race of owners, Didiza told Business Times she believed citizenship was the important factor, rather than race.

Listing foreign ownership was, said the minister, just to allow us to know where are the areas of acquisition and investment, and not to be able to say to people: You are foreigners and we now restitute your land.
 
Sunday Times

Publisher: Sunday Times
Source: Inet Bridge