Should home owners fear land expropriation?
The new Ramaphosa government has been tasked with the ANC’s land expropriation agenda on the back of a tide of populism but how much danger is there to residential property owners in reality? We take a direct look at the aims of the policy.
If you own or have been considering buying property in Springs, then you’ve probably heard about the very public debate around land expropriation without compensation. The EFF and some quarters within the ANC have sought to change the constitution to enable land expropriation without compensation, but the argument from within the rest of the ANC and the DA is that no changes need to be made to facilitate land distribution.
We have also seen President Cyril Ramaphosa and the ANC come out strongly and reiterating that no land grabs in any form will be tolerated whatsoever and that any expropriation will be done within the confines of the laws and with the utmost care and in pursuance of economic growth and development and business and investor confidence.
According to Stuart Manning, CEO for the Seeff Property Group, the current proposal is around agricultural land and there are many concerns surrounding the mechanisms of expropriation and effect on the greater community, property owners and in particular, the financial and economic impact. He says that the banks for example, in addition to agricultural land bonds, also provide extensive loans to this sector hedged against crop yields and other assets. There is also the impact on the Futures Market to consider.
In the end it appear that any policy of land redistribution will be a long time in the making and the President appears set to approach the policy cautiously, as his agenda of renewed financial growth and foreign investment would be impaired by a rash move in this direction. If the President maintains his current course then the only appropriation would touch currently unused, arable farm land. All this means is that residential properties are not targets and homeowners should instead be diving into the reinvigorated property market with gusto.
