Foreign role in SA property market overstated

Government's audit of foreign property ownership in SA will show it to be "completely insignificant" , Pam Golding Properties CE Andrew Golding predicted on Tuesday.

Golding's remarks came as hearings on the possible restriction of foreign land ownership were being held as part of a debate in Parliament , a process that could lead to legislation.

SA has become an attractive option for foreign property investors, particularly in Western Cape, and this has led to perceptions that overseas buyers are driving up prices, making it difficult for ordinary South Africans to own property.

Golding said at a news briefing that the notion of foreigners buying up all the land in SA was "completely untrue".

He said that in the case of Pam Golding Properties, foreigners represented 10% of sales, which was less than 1% of the total number of properties sold.

Also the economy was, to "some extent", influenced by sentiment, and restrictions on foreign ownership would send out a "negative signal to the outside world", he said.

Golding said the group, which had sales of R12,6-billion last year , would make a submission to the land affairs department on the issue of foreign ownership.

"We believe the potential restrictions on foreign ownership are misguided because the country is looking to promote foreign direct investment," he said.

Golding said his company sold properties worth R1-billion last year which was 10% of sales and represented about 1 000 home-owners to foreigners.

This money had a multiplier effect on job creation, as well as the promotion of tourism when the foreigners returned to their home countries. This established a significant case for such sales, Golding said.

He said the notion that foreigners caused prices to increase was "fallacious 99% of property prices are determined by the local market and not" foreigners.

Golding said government was looking to link the notion of land reform to foreign ownership, but these were two "completely separate issues".

"There is no question that land reform and a satisfactory solution to land reform is necessary but it is unrelated to whether foreign buy more or less property," he said.

"We support the notion of land reform, but what we don't support is the notion that the restriction on foreign ownership is going to assist in land reform."

Article by: Chris van Gass - www.netassets.co.za