The South African government has announced plans to introduce a contentious bill barring foreigners from buying land — a move that may spook foreign investors in the country.
In the proposal by Rural Development and Land Reform Minister, Gugile Nkwinti said government would implement a resolution that in future foreigners could lease but not own land in South Africa.
The Regulations of Land Holdings Bill would mean foreigners will only be able to lease land for 30 years.
However it will not allow for the expropriation of land currently owned by people from outside the nation. An estimated 7% of land in South Africa is owned by foreigners.
The weaker rand and lenient property laws make the country, which prides itself as the most developed economy in Africa, a top choice for property buyers from abroad.
But now the government is looking to put a stop to that trend.
Responding to concerns that the constitutionality of the bill could spook foreign investors in the country, real estate industry representatives spoke out against the proposal, saying overall foreign investment in South African property was small.
“There are development opportunities not attracting local money currently which may benefit from some foreign investment and whilst any country may want to safeguard its assets in the long term, government needs to present a balanced approach to avoid further alienating potentially good investors,” said Lisa Crossley, Director of Auction Exchange.
“This is completely ill-conceived,” said Andrew Golding, chief executive of Pam Golding Properties. “Particularly when there is a misconception that foreigners are pouring into South Africa and pushing prices up.”
Read more at SA Commercial Property News