South Africa calls for halt on land sales to white people Article Published: 13:51 23/10/2007 Article Classification: South Africa
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The deputy director-general of the Department for Land Affairs in South Africa, Sipho Sibanda, has called for a suspension on the sale of land and property to local and foreign ‘white people’ according to a report in South African newspaper The Times.

This statement comes in response to the country’s rising house prices, blamed by many on foreign investors pricing locals out of the market - particularly first time buyers. Presenting a report on foreign land ownership to parliament, Sibanda said: “A moratorium of about two years, prohibiting the disposal of state land to foreigners, and to nationals who do not qualify for redress under the national land policies and legislation, should be put in place."

When questioned on his statement by government ministers, Sibanda responded that such a moratorium is justified as 63.3% of the value of all houses in the country is in the hands of foreigners and commercial entities. He also wants an end to 99 leases saying they are tantamount to full ownership calling instead for 39-40 year leases.

With existing concerns about the effect of interest rates on sales in South Africa, many agents feel such statements can only do harm to the country's economy and international image. Richard Brady of Olive Tree International said. “There were similar concerns to this around election time last year. Olive Tree reviewed its position and decided to still promote South African developments, but to advise any potential clients of our concerns. This is a further ‘nail in the coffin’ and we are discontinuing recommending the country, due to the added risk that this represents.”

 Lionel Koster, managing director of South African-based developer Group 1, said that  “All this does is disturb the property market considerably and not achieve anything. He might detract that statement in a few weeks time but the damage to us and other companies is considerable.

"I have met with top government officials to discuss the proposed suspension of sales to foreigners and there is no way they will put a moratorium on this. It would have too great an effect on the economy. What I don’t understand is how this remark from Sibanda will help achieve anything after spending billions on World Cup stadiums for tourists then not allowing them, or white people, to buy property."

In 2004 the South African government launched an investigation into the amount of land and property owned by foreigners, with a view to a possible restriction on sales. The report was presented to parliament this week and is currently being examined by ministers.

South Africa isn't the only country looking at ways to counter the inflation caused by foreigners in its property market, with China introducing a number a major tax based disincentives to non-nationals and restrictions on ownership. Croatia has enforced restrictions on residential planning to prevent the so-called 'costa effect' and the popular ski resort of Bankso in Bulgaria introduced a ban on new construction at the beginning of the year.

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