Foreigners not to blame

A tightening up of foreign investors’ property ownership policies would hinder the economy and put a dampener on economic growth.

So says Barak Geffen, Executive Director of Sotheby’s International Realty SA, who believes that President Thabo Mbeki’s plans to tighten rules for foreigners buying land in SA is not good news.

"Foreign investors should be encouraged to invest in South Africa and we should be making it easier, not more difficult for foreigners to bring much needed skills and capital to SA to actively help grow the economy. One needs only look to the Australian example to see how foreign investors can help to uplift the standard of living for all South Africans," he said.

Geffen said the concern about foreign property ownership out-pricing local investors from our property market were unfounded.

Foreign buyers a small percentage
"Foreign buyers account for only about five percent of all the property sales in South Africa — so it’s still local buyers who are setting the trend and driving demand and supply which determines prices.

"If one looks at first world countries across the globe, they are brimming with skilled professionals, of varied nationalities. Any economy should be viewed as a macro-business that can only compete globally by attracting the best talent pool from around the world.

"‘These professionals actively contribute to these economies; this is what attracts further investment, adding to the country’s success, creating wealth for all.

"For SA to truly become part of the global market place we need to step up onto the world stage, attract and retain a highly skilled workforce by loosening work permit and residency criterion, allowing foreigners to actively contribute to our economy,"’ he says.

"Foreign ownership throughout SA is set to climb post-2010, as our international profile grows.

"But, foreign investors are mainly using their SA homes for holidays and plan only to move to SA permanently when they retire, due largely to the work permit laws which stands to make our economy less productive and competitive on a global basis."

Lessons from Down Under
Geffen says Australia’s work permit and residency laws are extremely favourable towards qualified professionals.

"This has helped contribute towards the country's sophisticated and resilient economy — rated as the world’s 13th largest — as 25 percent of its labour force is foreign."

Geffen adds that the ease of starting a business, low cost business location, highly skilled and multi-lingual workforce, as well as its enviable position as the best place in Asia-Pacific to live and work are other contributing factors towards Australia’s success.

"The World Competitiveness Yearbook 2004, ranked Australia as having the most resilient economy for the third year running, a direct result of the country’s 14th year of uninterrupted economic growth."

Article From: