This comment note deals briefly with some of the quantitative aspects of the Report on Foreign Land Ownership.
In arriving at conclusions and recommendations for this report, one would have expected a rigorous analysis of available data. Unfortunately the quantitative aspects of the Report have been dealt with poorly thereby creating the impression of uncertainty as to accuracy, veracity or relevance of such information. This can be illustrated as follows:
- In the executive summary, it is asserted that “foreign natural persons own around 3% of land in the categories of erven (land used for residential housing), agricultural holdings, farm land and sectional titles”. No illustration of how this percentage was derived is included in the report.
- In an addendum there is an attempt to demonstrate the magnitude and impact on the residential property market of acquisitions by non-South African citizens. The analysis provided carries a note that “the interpretation by individual estate agents is subjective based on accent, source of capital, etc”. In the analysis of sales which is only done for the Western Cape, Residential Property Price Ranger (“RPPR”) figures being “confirmed sales concluded by subscriber estate agencies” for the months from December to June are added to South African Property Transfer Guide (“SAPTG”) figures being the property transfer history recorded by the Deeds Office for the months from July to November. The RPPR figures include and the SAPTG figures exclude sales to corporate entities. Values by month are also reflected. Totals are provided for sales and in value terms but it is not stated if these totals refer to the country as a whole. No discussion has been provided, other than monthly and annual “percentage units bought by foreigners” which range from 4,2% to 8,6% over the 1999 to 2004 period (or 1,4% to 2,9% if the one set of figures can be assumed to refer to the country as a whole). As these figures (if they are of any merit) only relate to one province, it is difficult to understand their overall significance.
- It is mentioned that the State owns (along with land in trust on behalf of the State) approximately 29 million hectares or 23,8% of South Africa’s total land surface of 121 907 792 hectares.
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In a table in which this State land is analysed by province and by government department, a total of 24,2 million hectares is arrived at. However in this table, the allocated figures for only 3 of the 9 provinces tally to the provincial totals supplied, whereas the allocated figures for only 6 of the 11 departments tally to the provincial totals supplied.
In one of the tables supplied, it is calculated that 1,1% of the land surface is used for “urban residential” purposes, with “industrial / commercial” use at 0,2%, “natural pasture” at 73,2% and “arable / agriculture” at 12,1% (the balance being categorised as “nature conservation” and “forestry”)
In an analysis of the “patterns of ownership amongst individual foreigners” the one analysis that has not been done indicates that 295 580 hectares are owned by such individuals representing 0,24% of the total land surface of South Africa. As part of this figure, farmland constitutes 172 414 hectares or 0,17% of the land surface described as natural pasture and arable / agriculture. The conclusion reached in this part of the Report states that “foreign individuals with permanent residence status have acquired about 1% of urban residential land in South Africa” and “a probably insignificant percentage (0,5%) of rural land”.
In other analyses, there are attempts to quantify increases in land and building values over periods of time and unquantified (and unproven) assertions are made that “increased demand by foreign buyers” “have contributed to the significant increases in property prices of middle category houses”.
Unfortunately the treatment of the quantitative aspects of the Report along with the lack of rigorous analysis, inaccuracies, and failure to draw conclusions, serves to add to the poor quality of the Report. Possibly one of the most significant conclusions that can be gleaned from this Report is the insignificant percentage of the total land surface under foreign ownership.
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