S A Property Market Still an Option for Foreign Investors
Date: 2006-09-26
South Africa still remains a popular destination for foreign investors, be it for our pleasant climate, the cultural diversity of the Rainbow Nation or our unscathed majestic views. For those more mindful of the return on their investment, SA offers an investor-friendly developing economy, capital growth and quality at affordable prices.
However, for those wanting to invest, there is no better time than the present, as the seasons are changing. The economy will grow, the Rand will stabilize and 2010 World Cup will bring further demand for local property. In addition, as part of our land reform, the government is proposing land ownership restrictions on foreign buyers.
We are not the first, nor the last. Foreign ownership ban has being implemented by various countries globally, from restrictive ownership to a complete and absolute ban. As per Standard Bank’s Residential Property Gauge in March 2006, Australia, for example, restricts foreign ownership on residential projects or apartments to 50% of the total development, construction on vacant land purchased by foreigners must begin within 12 months and if purchasing an established property, 50% of the cost thereof must be spent on renovations, improvements or extensions. In Switzerland, amongst other restrictions, foreigners are not authorized to purchase more than 1 propert y. Restrictions are placed on tourist areas and large cities. All deeds of sale are conditional on government approval.
There is no doubt that we, including the powers that be, welcome foreign investment and wish South Africa to remain a global participant. Hence, we can expect careful consideration to be given to implementation of this proposal. I anticipate certain restrictions being placed on tourist destinations (including the very popular Atlantic Seaboard in Cape Town) and agricultural land (including winelands) intended for land reform.
My message to those who have visited our shores, have seen the investment opportunities or are merely expatriates hoping to return - make the choice, while you still have freedom to do so.
Tess Rodrigues
Managing Director