Sapoa issued a statement on the issue following media reports last week on a government-commissioned report on foreign land ownership which proposed the compulsory disclosure of the race, gender and nationality of all buyers along the lines of the Financial Intelligence Centre Act.

Business Day reported last week that the report, which has been presented to Agriculture and Land Affairs Minister Lulu Xingwana, said disclosure should apply to all past, present, and future registrations of property titles and that this should apply to all title holders, foreign as well as South African.

Sapoa CEO Neil Gopal says two key elements that need to be considered include the economic effect on the one hand, and the effect on foreign investor confidence on the other.

Property economist and Sapoa board member Francois Viruly says foreign ownership of land in SA “is negligible”. He argues that foreign ownership should not be targeted as a means to achieve broader policy objectives.

“We should avoid singling out specific types of properties and groups of investors when developing land usage-related policies. The focus should lie in the development of an appropriate land use management policy that is equally applicable to foreign and South African investors.”

Viruly says such a land policy should find an appropriate balance between creating an “enabling property market investment environment”, while at the same time “reflecting SA’s social economic objectives”.

“We certainly don’t want to start discouraging foreigners from investing in SA, either in commercial or the residential sectors.”

Gopal says Sapoa, which has about 860 members including property owners, property developers, property managers, large institutions, banks and other stakeholders, will be “scrutinising” the report closely over the coming weeks to assess the recommendations. Sapoa also aims to submit its own recommendations on the report.

The bottom line, says Viruly, is that policies that target specific investors are tricky to manage and require high levels of sophisticated compliance mechanisms.

“Often such policies have unintended consequences,” he says, pointing to examples elsewhere in the world where foreign investors have sidestepped ownership restrictions.

“If they can’t buy, for instance, they lease or get others to invest on their behalf, with ultimately little change having occurred in the spatial characteristics of the market.”