13 August 2019
The recent report by the Presidential Advisory Panel on Land Reform and Agriculture should be seen in a positive light and as something that, along with the recent drop in the repo rate, will create a good environment to buy property to diversify property assets.
It can’t be denied that the current and long-going debate on land reform, along with the weakening economy, has created uncertainty and placed a strain on the property market. Response to land reform as a topic is loaded with political agenda and fueled by fear, as people wait for details on how they will be affected.
With the advisory committee that is now in place, we are now at least moving forward in unpacking the uncertainty around this sensitive subject. Clarity is always a good thing: as long as there is doubt, people tend to become reticent to make long-term financial decisions like purchasing property.
As we begin to get an idea of how the Constitution will be changed and how expropriation of land will unfold, some confidence will be restored in the country as investors learn where they can invest without fear that that investment might be taken away. The committee will start to shed light on what land will be used for reform, who will benefit from this and how compensation (or not) will be handled.
Our Constitution is one of the strongest in the world and our current government leadership understands the business principles that drive economies upwards. These are solid foundations to operate from.
“It is important for South Africans to realise that the government has made it clear that the focus is not to expropriate privately owned homes and land but rather, unused land, abandoned inner city buildings, speculative land, unutilised land held by state entities and land obtained through criminal activity.”
The mandate of the multidisciplinary committee on land reform is to operate within the boundaries of what is fair and what is lawful. These parameters are complex, as is the process of transferring ownership of immovable property in South Africa. My advice is to identify legal experts who are following the committee’s work closely. Seek their professional advice, rather than taking that of a layperson, regarding your unique circumstances. The wheels of change, I think, will turn slowly. That gives land and property owners who are likely to be affected time to understand and respond (rather than react).
I view the recent report in a positive light and see it as something that, along with the recent drop in repo rate, will have a positive effect on the property market. That makes for a good environment in which to be purchasing property. Now is a good time to look at one’s property portfolio and to consider diversification or relocation of assets.
Tourism, for example, presents an enormous opportunity for land and property owners in South Africa. According to the government, “when tourism’s indirect and induced benefits across a very broad value chain are factored in, the total contribution amounts to R412,5 billion, or 8.9% of the GDP. Tourism directly and indirectly supported about 1,5 million jobs in 2017, 9.5% of total employment, and there is potential to grow employment in the sector to 2,1 million jobs by 2028” (Source: https://www.gov.za/about-sa/tourism).
Change is coming and, with that, there are undoubtedly going to be opportunities. I encourage land and property owners to be open to those opportunities.
LET'S OPEN DOORS
Article from propertyprofessional.co.za