Are Foreign Real Estate Investors Not Welcome In South Africa?

Are Foreign Real Estate Investors Not Welcome In South Africa?

South Africa’s president Jacob Zuma’s proposal to  bar foreign investors from buying land in the country is likely to hurt the country’s attractiveness to investor, Analysts told AFP.

In a sweeping land reforms that seek to correct inequalities that were occasioned by centuries of colonial and apartheid rules that left mostly white farmers owning land, the second largest economy in Africa has saught to limit foreign real estate buyers to between 30 and 50 year leases.

“What we are effectively saying to them is they (foreign investors) are not welcome here,” Lew Geffen of Sotheby’s International Realty told AFP.

“While the percentage of foreign ownership is low, the caliber of ownership is exactly what we need in this country.”

President Zuma said on Saturday that the government could exercise a “right of first refusal” to lease land to any foreign investor “if the land is deemed strategic.”

“Zimbabwe Style” land reforms?

Sector players said the proposal could push the country into a Zimbabwe like land reform era in the early 2000’s where hundreds of white settler farmers were violently evicted from their properties by the local blacks.

South Africa is currently processing claims from as many as 400,000 black families, which were evicted from their land during the apartheid rule, before moving to compensate them. These compensation could cost the government anything from $12 billion to $17 billion.

Zuma’s most vocal adversary, radicalist Julius Malema, has been know to advocate for blacks to take back land from the white settlers “Zimbabwe style”.

White South Africans, who account for about 10 percent of the population, still own as much as 80 percent of the land 20 years after the end of apartheid.