Real Estate Investor Magazine South Africa Real Estate Investor Magazine - April 2017 | Seite 26

MARKET VIEW
New Legislation
Bad News for Consumers and Property Industry
BY LEW GEFFEN
A
s the real estate industry enters Q2 of 2017,
I can’t help but hear that old Chinese curse
“may you live in interesting times” playing in
my head like a stuck record.
Besides the Western Cape, which seems to be the
desired residential destination of the entire country at
the moment, the market is completely flat and in some
areas even moving into negative equity.
We’re unquestionably in a recessionary phase, but
sellers are in denial and expect to achieve the same
prices as when the market was still reasonably buoyant
in 2015.
Two of the central drivers of the current industry
and indeed broader community’s problems are the
country’s dire economic situation and deteriorating
public trust in government leadership.
In the 2017 Edelman Worldwide Barometer, that
for the past 16 years has globally measured the general
population’s trust in four key institutional areas —
business, government, NGOs, and media — South
Africa ranked first in its distrust of government. Only
15% of the population has confidence in the current
political leadership.
Even more problematic for the property industry,
consumers and foreign investment confidence are
several proposed new land bills. The move appears to
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APRIL 2017 SA Real Estate Investor
be an attempt to win back voter confidence, but these
new bills have implications for long-term economic
growth and national food safety.
For land owners and the real estate industry, among
the most important proposed legislative changes are
the Property Practitioners Bill, 2016 (at the time
of writing this column not yet gazetted for public
comment), the Draft Regulation of Agricultural
Land Holdings Bill, the Home Loan and Mortgage
Disclosure Amendment Bill and of course the
Expropriation Bill.
While we haven’t (as yet) seen the Property
Practitioners Bill, we’re expecting a number of changes
that are at best innocuous and at worst ominous for
the industry. These include quotas, more regulatory
functions that should be government-managed falling
to the industry to enforce and ultimately more time-
consuming transactions and higher property sale and
purchase costs for consumers.
Among the legislative changes in the Agriculture
Bill are total bans on non-citizens owning farms and
that any foreigners who currently own agricultural
land can’t sell their property on the free market; the
Land Reform Ministry has first dibs. Only if the
Ministry doesn’t want it, can a farm be sold through
normal channels.
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