Calls for Didiza to drop property law

Posted On Monday, 05 July 2004 02:00 Published by eProp Commercial Property News
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SA's property industry called yesterday on government to scrap plans to limit foreign ownership of land, saying it would thwart plans to lure foreign investors into the country's commercial market.

SA's property industry called yesterday on government to scrap plans to limit foreign ownership of land, saying it would thwart plans to lure foreign investors into the country's commercial market.

The industry's plea comes a few days after Land Affairs Minister Thoko Didiza surprised the market , announcing that her department was considering drafting laws that would limit foreign ownership of land in SA. She cited the escalating property prices in certain areas as the rationale for the planned laws.

But South African Property Owners Association president Lynette Finlay said yesterday that Didiza should scrap the idea.

"This idea needs to be permanently shelved. There should be no discrimination between foreigners and South Africans when it comes to land ownership," she said.

She said the proposed law was "especially startling as the trade and industry department is spending millions on getting more investment into SA"
and this proposal countered that intention.

Finlay said foreigners had boosted SA's residential property market, and were now turning their eyes to the country's commercial property sector. The danger, she warned, was that the laws may scare foreigners from investing in the niche commercial property market .

"If the investor overseas is considering putting money into SA's commercial property market and sees any law which threatens the security of those funds then he will opt against investing," said Findlay.

In the past five years, house prices increased 43% in real terms, excluding inflation.

But critics of Didiza's plan said yesterday the real thirst for property was in the low-end affordable housing market and not in the top-end, which had driven price increases. Equally, there was no evidence to suggest the price increases in the top-end had filtered down the chain to low-end housing.

HSBC political analyst Nic Borain said yesterday that Didiza's plan "raises questions about political risk and property rights".

He said the plans were "most likely the result of crossed lines and poor communication, but that does not stop the damage this could do."

Didiza's plans would affect not only foreigners owning top-end residential property, but also Irish investors who were renovating Cape Town's inner city and foreign owners of tourism ventures and commercial farms.

"The message that has come through is at best incoherent and at worst threatening. If government is seriously considering impeding or forbidding foreign ownership of land in SA, they will harvest what they sow," said Borain.

"Government ought to coordinate its utterances about its commitment to the market determination of the price of land and any other property," he said.

Last modified on Thursday, 15 May 2014 15:38

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