Making property ownership more accessible to more peopleThe costs of buying a property in South Africa include transfer duty, attorney's fees, and deeds office registry fees. As a rule of thumb, these costs amount to 8-10% on top of the purchase price of any property over R900,000. Given that buying property is likely the biggest financial investment that most people will ever make, these extra costs can be a burden and barrier to entry. Paul Stevens, CEO of Just Property Government has a responsibility to make South Africa an attractive investment option to both locals and foreigners. President Ramaphosa is acutely aware of this and is acting accordingly. Wednesday, 6 November, marked the official commencement of the second South African Investment Conference, a key event in the drive to secure over R1.2tn in investment commitments over the next five years. By the end of the conference R200bn had been pledged by local and multinational businesses. Transactional costs are, most likely, lower down the list of concerns for foreign investors as they contemplate the greater impacts of our energy crisis, land reforms, fiscal and regulatory issues and more. And many locals are facing a credit crisis that means they can't, rather than don't want to pay an extra 20-25% on their assets, as Samuel Seeff, chair of Seeff Property Group has noted. World Bank’s Ease of Doing Business IndexBut I am optimistic that our government has the right focus. The president has said that his administration set itself the goal of progressing to the top 50 in the World Bank’s Ease of Doing Business Index (South Africa is currently at number 82 out of 190). A nation's ranking on the index is based on the average of 10 sub-indices, one of which is registering property (procedures, time, and cost to register commercial real estate). In terms of African economies, Mauritius is currently ranked 20th worldwide. Amongst the four reforms that the World Bank said had facilitated Mauritius’s improvement across eight of the 10 rankings was “simplification of ownership transfers – with a reduction in transfer costs”. Perhaps surprisingly, Rwanda is also in the top 30. Rwanda has an online property registration service, similar to that envisioned for South Africa, and it takes just seven days to transfer property there. Transfer costs are 0,1% of the property value and for this, Rwanda ranks second in the world for ease of registering property. South Africa is ranked 82nd overall and 106th for ease of registering property - but procedures and time are already being addressed, for example:
About Paul StevensSince 2013, Paul Stevens has been the CEO of Just Property Group Holding (Pty) Ltd which controls an international group of property franchises specialising in residential sales, rentals and management. He joined as a franchisee in 2003 and now, as CEO, drives the strategic direction of the Just Property brand with his charismatic optimism. He is also actively involved in the evolution of the South African property landscape, working closely with high-level industry stakeholders.
View my profile and articles... |