John Loos, a household and property sector strategist at FNB, also surprisingly confirmed yesterday that there was very little mention in FNB’s estate agent survey about expropriation of land without compensation.
Loos said expropriation of land without compensation might come to the fore in the second quarter, adding that they did not ask foreigners for their views and only estate agents on their views of foreign interest and sentiment towards acquiring residential property.
The ANC’s elective and policy conference in December adopted a resolution to expropriate land without compensation to redress racial ownership disparities subject to it not impacting negatively on food security or the economy.
This led to Parliament in February passing a motion mandating the Constitutional Review Committee to review section 25 of the Constitution and report back to Parliament by the end of August this year.
FNB said that based on two quarter moving average, foreign home buying as a percentage of total home buying increased slightly to 4.33percent for the two quarters up to and including the first quarter of this year, from 3.96percent in the previous two quarters.
But FNB added that foreign buying of South African homes was still significantly lower than the 5.72percent high reached in the third quarter of 2016.
Loos said estate agents were also asked whether they perceived an increase, decrease or unchanged level in foreign buyer numbers compared to 12 months ago.
He said the aggregated response was biased slightly in favour of “less foreigner buying” in the first quarter of this year.
Loos added that 87percent of respondents reported unchanged levels of foreign buying, 3percent “a lot less” foreign buying and 4percent “a little less”.
He said this meant a total of 7percent of respondents indicated less foreign buyers compared to a year ago compared to 5percent perceiving there to be more foreign buyers.
Loos said there was a multi-year decline in the percentage of African continent foreign buying in South Africa to 21.29percent in the first quarter of this year from a 31percent high in the first quarter of 2016. However, Loos said there was a slight increase in buying of domestic residential property by South African expatriates living abroad to an estimated 1.51percent of total buying in the first quarter from a multi-year low of 1.21percent in the third quarter of last year.
Loos attributed the weakening estimated demand for domestic residential property by both foreigners and South African expatriates to dampened investor sentiment towards South Africa in general last year.
He said this was probably partly caused by the country’s multi-year economic stagnation, uncertainty regarding future economic policy and widely publicised negative news, such as sovereign rating downgrades to “junk status”.
“However, we have started 2018 with a noticeably more positive mood in South Africa,” he said. “It would not be surprising to start seeing estimates in foreign buying levels of domestic residential property, along with expat home buying levels, starting to rise.”
- BUSINESS REPORT