SAPOA CEO Neil Gopal say that the association has been keeping a close eye on the current policy debate around foreign ownership of land.

Two key elements that need to be considered: economic impact on the one hand, and the impact on foreign investor confidence on the other.

“Currently, foreign ownership of land in SA is negligible ,” explains SAPOA board member and respected property economist Francois Viruly and 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. Such a land policy should find an appropriate balance between creating an enabling property market investment environment, while at the same time reflecting South Africa’s social economic objectives.

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

The report was presented to the Minister of Agriculture and Land Affairs this week, but has not yet been released for public comment.

“We’ll be scrutinizing the report closely over the coming weeks to assess the recommendations and their implications for the property industry,” says Gopal, adding that SAPOA 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 explains, pointing to examples elsewhere in the world where foreign investors have simply 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.”

SAPOA’s President, Marna van der Walt says, “We should not see this as only a residential issue but it also will have a massive impact on the other sub sectors of the property industry such as the desirability of foreign investment in South Africa, direct ownership or listed.”

SAPOA intends to play an active role in taking the debate forward, says Gopal, to ensure that the interests of the SA commercial and industrial property market are taken into account.