Confusion over ban on foreign land ownership

Confusion over ban on foreign land ownership

2015-02-13 16:10

Cape Town - Only about 3% of all property in South Africa is foreign owned and, at best, 2% of all annual purchases are done by foreigners, according to Seeff chair Samuel Seeff.

"The reason for wanting to restrict ownership and who this is meant to benefit is then rather difficult to gauge," said Seeff.

"It seems to just be that time of year again when the land debate regrettably turns to foreign property ownership and, rather than advance a solution to the land issue, it sends the wrong message to investors and puts undue pressure on the property market."

Certainly insofar as privately held residential property is concerned, the wish to restrict foreigners seems to be more about politics than land redress, in Seeff's view.

"The myth that foreigners buy the most expensive property and pay exorbitant prices needs to be dispelled conclusively. While the weak currency has made our real estate attractive, foreigners, like every buyer out there, wants to pay the lowest possible price. In fact, it is South Africans who understand the nuances and characteristics of the South African property market that are paying the highest prices," he said.

READ: Zuma lost GPS signal on land ownership - business

Most of the foreign buyers are so-called UK and northern European "swallows", who travel south to escape the harsh European winters. They stay for three to four months over the SA summer and often bring friends and family.

"They bring pounds and euros, shopping, eating out and visiting tourist attractions, all of which are vital job creators," said Seeff.

What is a foreign buyer?

Seeff wants to know what constitutes a foreign buyer. Is it a permanent resident, someone who visits for up to six months or someone who just comes for a short-stay?

"What about those from the rest of the SADC-region and African countries like Nigeria, who have growing business interests in Johannesburg and are looking to buy homes in Sandton? Do we want to discourage this?" asked Seeff.

"Foreigners also bring progress. The regeneration of the old run down Cape wine farms and Cape Town’s inner city development being two prime examples, but also of leisure facilities and tourist attractions. All of this brings money into the economy and creates jobs," said Seeff.

"Finally, is this correct constitutionally? Can you be prevented from a person from selling your own land or property to a buyer of your choice? Will restriction not just encourage deviant behaviour and circumvention?"

READ: Foreigners won't be allowed to own SA land

He would rather encourage government to engage with industry experts before making statements "that do little else other than to upset the market and create uncertainty".

Psychological effect on foreign investors

Erwin Rode, editor-in-chief of Rode’s Report, said the decision to ban foreigners from owning land would have a psychological effect on foreign investors thinking about moving to South Africa.

Listen to the full interview:

“I would suggest that it is going to be very negative because … it will push African scepticism,” he said.

“Only about 1% of properties in this country are owned by foreigners,” he said. “When these guys buy into South Africa, they bring capital, [and] they bring in expertise, technology.”

He said the decision to cap land ownership to 12 000 hectares was concerning. “To start with, it’s a very arbitrary figure. 12 000 hectares in the Boland is not necessarily the same as 12 000 hectares in the Karoo; the one being extensive and the other intensive.

“There is no way that 12 000 hectares can be an appropriate limit,” he said.

He said if the Constitutional Court allowed it, they would have to divide the country up. “It’s not a very practical solution as it stands,” he said.

READ: Sona wrap: Zuma drops bomb on land ownership

Dr Andrew Golding, chief executive of the Pam Golding Property group, cautions that every time this issue rears its head, it further serves to erode confidence in the country as an investment destination – mainly as a consequence of issues of uncertainty.

"And while nationally this is still a proposal, the fact is that by its very nature it erodes foreign direct investment appetite, and potential investors who may be weighing up South Africa versus a number of other destinations will potentially simply choose to invest elsewhere," said Golding.

“Certainly it is worth reiterating that the level of foreign buyers of residential property in South Africa is so insignificant relative to the total market, but more importantly, the benefits of foreign investment in property in this country and the knock-on effect of that investment far outweigh any perceived negative."

He said leasehold is not a conventional South African methodology and would require significant understanding and implementation of dramatic changes to current property practice, not to mention the question of whether or not this is a Constitutional issue as well.

Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, said although there was prior discussion around the position on foreign ownership of land, it was expected that foreigners would only be restricted to some degree when purchasing land.

“While we recognise the fact that a bill will be implemented later this year limiting foreign land ownership, which is a concern to the real estate industry, the more concerning issue is the lack of stability displayed at the State of the Nation address, which in turn could impact on foreign capital investment into the country,” said Goslett.

“This in itself could lead to a lack of infrastructure development as well as a lack of employment opportunities for South Africans. We trust that the leadership of the country will make the right decisions that are in the best interest of its people.”

  • Keagan Phillips - 2015-02-13 16:29

    I'm don't have much, but I'm liquidating all my assets and moving it out of the country the moment the gov reneges on private property rights. This is dangerous territory and one of the reasons Zim experienced capital flight and eventually hyperinflation.

      Fred Smith - 2015-02-13 17:32

      I'm not sure we should wait till then. By that time it will be too late, you can be sure that Government will block a large scale outflow of capital which will then cause the Rand to collapse.

      Kaylin Minx - 2015-02-13 17:39

      Thats why i work in bitcoins & USD. the rand is going to plummet even more as South Africa Zimbabwenizes itself.

      Claus Mog - 2015-02-14 05:37

      Don't wait. I'm liquidating my business and selling my house as soon as I can and getting out of the country. I can make a new home and start another software company almost anywhere in the world. The jobs I provide, though few, are welcomed elsewhere.

      Jeremy Forbes - 2015-02-14 17:00

      No worries, this is the oldest ANC tactic when they are broke, they float these radical ideas and then wait for big business to pay them off not to go in the radical direction. Nothing will come of this.

  • Hennie De Ruyter - 2015-02-13 16:48

    So we want foreign investment but we don't want them to invest here. Sorry it has been a long week, I don't understand!

  • Majaji - 2015-02-13 16:51

    This is a good move at last, why did it take this long? We are South Africans, yet we are so poor in a wealthy South Africa. A country's wealth must be directly propotional to the wealth of it's citizens.

      Majaji - 2015-02-13 17:03

      George Slade I do not recall any of the beneficiaries of apartheid giving up some of their land and wealth to those who were oppressed. Land will be expropriated without compensation, let us chat then and you shall tell me why most whites will be poor by

      Majaji - 2015-02-13 17:19

      Just because you inherited then your brain is functioning, come on! get a life.

      jason.wolff3 - 2015-02-13 17:28

      I can guarantee you that you will be worse off if policies like these are implemented. Let's watch this space. The poor keep getting poorer who's fault is that. Not the White mans pure and simple the ANC and your stupid policies

      Karel Theart - 2015-02-13 17:34

      Wealth come from hard work, not from owning land

      Kaylin Minx - 2015-02-13 17:44

      Majaji are you a moron? the countries wealth was due to foreign investment & intelligent workings, which as of last night was thrown out the window. Think the ANC is going to give you lots of money for being South African? you know nothing of the real world.

      Nu Vérité - 2015-02-13 17:48

      Majaji, your brothers in the Transkei owns lots of land and have for many years, they are dirt poor.

      Majaji - 2015-02-13 17:55

      You need to understand that Africans in Africa as a whole are landless, hence the sooner Africans own their land is the soon they can build structures so that they can trade. It is in my understanding that having others who will trade with you, contributes to your success. Who owns the major supermarkets? mmmmmhhhh Who owns the manufacturing companies? Look at major groups, they are a success, hence we shall soon get there, it is not that far anymore.

      Robert David Allam - 2015-02-13 17:57

      d Allam2015-02-13 05:22:02 PM MAJAGI your statement explains why sub-Saharan Africa and it's Governments are the laughing stock of the entire world. Every single thing of any value in sub-Saharan Africa was created by a white man to the black man's benefit.

      jorra8 - 2015-02-13 17:58

      You are dumb

      Kaylin Minx - 2015-02-13 17:59

      @Majaji - Who owns the major supermarkets? Educated businessmen. nothing to do with land Who owns the manufacturing companies? Educated Businessmen. nothing to do with land. Your friends in transkai own tons of land & are as poor as rocks, why?

      John Darnielle - 2015-02-13 18:01

      Majaji, I am actually surprised you can sort-of write because you are just unbelievably stupid. Or do you want our economy to turn into Zimbabwe? What the hell is wrong with people who think like you? You keep telling yourself all successful white people inherited their money and the only reason you are not rich is because of apartheid. But it's very very clear that you have no idea how the world works. Do you think if the foreigners do not buy land here that land is somehow going to end up in your hands? There is plenty of land to buy, why don't you just buy it now? If you can't, how will the fact that foreigners can't either change that fact? Let me spell this out for you: the economy is not a racist like you. The economy needs business and investments (from anyone) or it will stagnate and eventually collapse. Bad economy = bad for everyone, especially those who are already poor. ANC = bad economy. Please don't procreate.

      Majaji - 2015-02-13 18:05

      To own companies needs finance, who owns the banks/financial institutions. Land is used as colateral. White men made black land communal land so that a black men can not use his land to access financen One has to comprehend that success of one party is dependent on other parties too. Black men was institunalized to have nothing.

      Majaji - 2015-02-13 18:27

      Darren Bishop you too don't be stupid. Since when is success achieved overnight. I suspect you are one of those who inherited. You have no clue about starting with nothing. Success can only be achieved through hard work, hence time is a major factor. Imagine all the resistance and sanctions from the white community. Zimbabweans are busy working, please stop disturbing them.

      Jan Vandam - 2015-02-13 18:31

      Majaji why don't you crawl back into your hole and hibernate till forever.

      Majaji - 2015-02-13 18:40

      Jan Vandam, shame on you. I am in Africa, my hole....what more do you want me to do. Maybe you wish I take over well that is not African at all. I am happy here at my home.

      Kaylin Minx - 2015-02-13 18:56

      Majaji it is not YOUR home, it is ours. we all live here, nothing makes you more important than the person next to you.

      Gawie Gorrel - 2015-02-13 19:12

      @Majaji I can only pity you. Instead of making worthwhile comments you have your hat stretched out waiting for handouts. You and yours were not the only people to be colonised. Get out there start working and show us you can do it. Earn respect, like most successful people do. You simply are oblivious of how the economy works. It makes me more and more disgusted with the likes of you, always blaming everyone else, look in the mirror my friend. Very few people INHERITED. Stupid pathetic loser. This constant winging and weeping will get you nowhere.

      Majaji - 2015-02-13 19:20

      Gawie Gorrel I am hard worker and everything I own, I worked for it. I do not live on handouts. Fact is, I am excited that milestones are about to be reached in my life time. In the near future both black and white will have to work hard to survive, no more inheritance. lol. this is good news

      Nu Vérité - 2015-02-13 20:29

      Majaji, your hole is in North Africa, time you go back.

      jorra8 - 2015-02-13 20:37

      Listen china, if you think that all whites got everything for free, I'm going to think that all blacks are skelms. We need to change our attitudes, otherwise, we might just as well start to prepare ourselves to fight for scraps that our leaders leave us...

      Majaji - 2015-02-13 20:40

      Nu Vérité I refuse to be told by a foreigner about my home, my home is here in Africa, period. If I must remind you that borders were not there in Africa, thus no African was jailed by the whites through creation of artificial borders with only one aim, which was to divide and conquer Africa. Read your history, your forefathers wrote, black people use to move from one place to another seatching for greener pastures for their livestock....I say that is incorrect. Here is the correct version "black people owned the whole of Africa and that is why they moved freely all around Africa, they did not upset nature.

      Majaji - 2015-02-13 20:52

      Jorra_GT please accept my sincere apology. Yes, not all whites inherited. We all have the same enemy, that is government corporations and the group of bankers. We ordinary humans, we are all victims. I agree it is not good to generalize.

      jorra8 - 2015-02-13 20:58

      Cheers mate, for you I'll kill the bull.

      Darren Bishop - 2015-02-13 21:12

      You right Majaji how foolish of me to use Zimbabwe as an example lets rather use Liberia I mean they gained independence in 1822 and I must say their economy is booming or would you like to give me a better example perhaps? Oh and by the way I inherited nothing I worked for all I have!

      Nu Vérité - 2015-02-14 07:05

      Majaji, Aftica did have borders, every tribe had their own land were they grazed their cattle, your ancestors kand were they lived and had cattle is in North Africa, their is no such thing as black people own Africa, Period. Blacks never paid for land to begin with, this means all land is fair game, either by taking it by war or settling on kand that is unoccupied, period, and if you think my farm which I paid for belongs to you I invite you to come and try and take it.

      Majaji - 2015-02-14 08:54

      Darren Bishop, the more I read your comments is the more I realise that we black, white, Indian etc. we are all victims. I am amazed by your failure to comprehend simple issues. I have commented above about institutionalization. Success is achieved through a series of complex interelated patnerships. How on earth would you expect Liberia or Ethiopia to make it on their own, when all their potential black partners were all landless. Indians trade with Indians, so does white and white. Who must trade with the Liberians?...... Africans were reduced to nothing but only consumers. The sooner Africans regain ownership of their land and natural resources is the sooner Africans can trade. Africans are not trading, they are consumers and labourers. Why is it so hard for you to comprehend this simple salient fact.

      Majaji - 2015-02-14 09:00

      Nu Vérité that is the most stupid comment ever. Africans originated in Africa, hence Africa is by virtue of creation, the inheritance of Africans. Borders are a creation of the white men, created for control. Look at the world map. Before the white men constructed a canal Africans could walk from Africa to bordere at all.

      Pieter Pretorius - 2015-02-14 14:37

      There were also no black people in South Africa, only in North Africa. The whites invaded from the South and created jobs, industry , food and wealth. At the same time blacks invaded from the north creating.... what again? Many years ago it was only bare land. Then some Khoi moved down South and they were here first. There were nothing like land ownership. If there were, the land would be owned by the Khoi, not black people. Why black people think they used to own anything beats me.

      Nu Vérité - 2015-02-14 16:13

      Majaji, all humans originate from Africa, you numpty.

      Nu Vérité - 2015-02-14 16:20

      "Look at the world map. Before the white men constructed a canal Africans could walk from Africa to bordere at all." Exactly Majaji, those Africans did walk to Asia and Europe, they are my ancestors.

  • Emone Nomore - 2015-02-13 16:52

    The foreigners will now just go and buy property in other parts of the world where their money is welcome. This was not thought through properly by the ANC. It could have negative consequences.

      Jane Longmuir - 2015-02-13 19:05

      I'm guessing they don't care, it will give them something else to blame foreigners for!

  • NickvanGraan - 2015-02-13 16:55

    Once again, government focussing on non issues to divert attention from their failures. A bit like Mugabe stealing land from white people who make up 0.2% of the population, to divert attention from the collapse of Zim due to gross maladministration and corruption.

  • Todays Realist - 2015-02-13 16:56

    Confusion, confusion, confusion! So what is new?

  • Mark Smith - 2015-02-13 16:56

    Does this mean that people that have free RDP houses can't sell them to foreigners anymore.

  • Craig Thom - 2015-02-13 17:03

    This is butternut at his best ,misinforming the uninformed!

      Robert David Allam - 2015-02-13 17:25

      Spot on !

      Nikki Downes - 2015-02-13 17:32

      And for no reason other than to gain popularity. And the worse it's gets, the more he we blame us. And no one will stop and ask why, after all these years, is it getting worse and worse.

  • Robert David Allam - 2015-02-13 17:22

    MAJAGI your statement explains why sub-Saharan Africa and it's Governments are the laughing stock of the entire world. Every single thing of any value in sub-Saharan Africa was created by a white man to the black man's benefit.

      Majaji - 2015-02-13 18:08

      That must change. Never ever again must Africans be robbed their platform for growth. The land and all institutions in Africa must be owned by Africans.

      Robert David Allam - 2015-02-13 18:17

      What must change aschlok?

  • Nana - 2015-02-13 17:25

    I am no economist but I think foreigners don't own land due to the pressure of land. There isn't a lot of space in many territories and they can afford to do so. This land redress is being done all wrong

      Kaylin Minx - 2015-02-13 17:49

      Correct. It does not mean land will given out willy nilly to anyone that wants it, all it means is foreign investments will reach a grinding halt & be moved to a country where they can opperate unpressed. this is going to do ALOT of damage to not only South Africa but all of its citizens.

  • Hentie Vollgraaff - 2015-02-13 17:26

    Not so long ago Zuma said ''SA is open for business'', now no foreigners may own land. What about growthpoint or redefine shares? Those are also owning property. Next step all bank and mining companies have to be 51% state owned. And we know how good those are doing

      Nikki Downes - 2015-02-13 23:03

      I know right? He is schizophrenic in everything. He will say and do anything to stay in power. Anything

  • leo.simango.3 - 2015-02-13 17:28

    Im sure consultation were done to come to such conclusion, if seeff went consulted its unfortunate, but im certain advise are from people in the property industry. I bought one of my property from a foreigner who bought it from a bank on auction. Practically he bought it today then i bought from him the next day. I support the move very much, otherwise this guys will own us soon

      Tondi Staga - 2015-02-13 18:21

      Very true. But some greedy short sited people r more concerned about the so called investors. How will future South Africans b proud SA wen most of the land will b foreign owned. 2% is stil very little 4 nw bt wat happens in some decades or century to come. Da land is from our ancestors n it belongs to d future generations of SA.

      Gawie Gorrel - 2015-02-13 19:40

      @Leo and New And how id your ancestors get the land when they came from west,north Africa. My Choi friend is very interested in you answer. And Leo, so you benefitted from the misery of another who had his land confiscated by the bank? Nice chap you are. Give it back

  • Starletha King - 2015-02-13 17:33

    What about people with dual citizenship?

      George Slade - 2015-02-13 18:29

      If you are a dual Citizen then you are a RSA Citizen --whats the problem ??

  • Bobbie Booyse - 2015-02-13 17:43

    This has to be take to the constitutional court, this is economic suicide

  • Gareth Bench-Capon - 2015-02-13 17:59

    Im slightly confused by this. So no foreigners are allowed to buy/ own property.But foreigners are only buying expensive properties. This is an assumption but think its a fair assumption. How does this proposition benefit the disadvantaged? As far as i see it no disadvantaged person will have the money or bank backing to buy expensive properties. Surely there is a better way to help the disadvantaged as blocking foreign land will only help benefit the "elite" and not the disadvantaged. PS Does that mean Mugabe isn't allowed to own all those properties in llandudno aswell ?

  • Robert David Allam - 2015-02-13 18:22

    I was not correct in saying the Europeans built everything of value in sub-Saharan Africa I was incorrect. Indians and Arabs contributed greatly in moving Africa out of the dark.

      Gawie Gorrel - 2015-02-13 19:16

      @Ntuli And where was the proud Zulu nation, while the Boere and Indians built the Sugercane farms? Probably dancing and singing while the women worked. Yebo, oh Zulu warrior!

  • willem.louw.16 - 2015-02-13 18:22

    This is a Step closer to The ultimate Gral of disenfranchising White people. We are already labeled colonialists, imperialists and settlers... It's a small Jump to label us all foreigners, and to expropriate land without compensation. ANC is no better than Verwoerd

  • Walter Kohlhöfer - 2015-02-13 18:25

    Amazing how real estate people always tell us how popular SA property is with overseas buyers. Clearly not! And now even less

  • Tyronne Jardim - 2015-02-13 18:28

    What only 3% is foreign owned whats the big deal here then and who owns the rest if not foreigners ...cause the white population is under 15% , and not all own farms and the land ...they rent as well who owns the majority then ?

      Tondi Staga - 2015-02-13 19:57

      Its actually 7%. Wich is alot.

      Tondi Staga - 2015-02-13 19:57

      Its actually 7%. Wich is alot.

  • Kagisho Dark - 2015-02-13 18:33

    The media will mislead the population.

  • Kagisho Dark - 2015-02-13 18:33

    The media will mislead the population.

  • Charl Du Toit - 2015-02-13 20:48

    It is the Bob Mugabe formula - the answer to ceasing working mines to ruin them. Gimme gimme gimme - a bit like the dog that chases a passing car. What will the dog do with the car when he catches it?? Zuma and his cronies will end up selling of the steel as the black mine owners have almost no success keeping a mine productive. Lets just go back to pre Jan V. Riebeeck and live in mud huts, plant a few mealies, let the cows stay around the home, and so on. The lights are already getting very dim....

  • Nathan Elston - 2015-02-13 22:58

    We lAugh at the New south african Constitution.

  • catcha.wakeup - 2015-02-14 05:24

    It does not help if you put your foot in your mouth then as the opposition to take it out.

  • Elias Nerwande - 2015-02-14 06:14

    L think the first thing yu must have as a South African is land nt just land to built yur house ,land fr everything ,if we cant use our land we lease it to someone ,we cnt have foreigns own our land We are Africans land is the most valuable asset we have ,L m a transportr ,one day l ask about the owner of the farm wr l was supplying fertilizer ,thy told me the owner he doesnt leave in Africa he owns many farms ,look at Mpumalanga province farms are now coal mines ,Who is benefiting frm that? we sits crumbling on avery small piece of land .L cnt own a piece of land in China or Britain ,l must own it hr in my country fr free

  • Jimmy James - 2015-02-14 11:05


  • Hendrik Botha - 2015-02-14 13:46

    I hope this includes hos best buddies the Guptas

  • wolfgang.keyser - 2015-02-14 14:47

    The government should not be allowed to put any limitation on land ownership.

  • Tinashe Muzambi - 2015-02-15 09:15

    Tragic news for a nation that is exemplary to the rest of the continent, first it was xenophobic attacks and now the government wants to add legitimacy to that very sprit that fights a non existant enemy.

  • Jacques Ackermann II - 2015-02-15 10:45

    It's the same property agencies that overvalued and overselled at the expense of local buyers. They have been racking in the billions over the years. Offcourse he will speak publicly as it will effect there gravy train. I have seen in cape town property's so overspeculated to the extend that apartments are going for 1.5 mil plus. Utter and complete madness. I hope the land bill does through and that the house property market nose dives. There is a cabal monopoly in market that is discriminating against local buyers. House prices and car prises have grown at 3 to 4 times the rate that salaries have grown so good to see government implementing some sort of restrictions to curve this unstainable economic environment.

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