There is no need for residential property owners, buyers, sellers, and investors to be concerned about the recently enacted Expropriation Act of 2024, says Samuel Seeff, chairman of the Seeff Property Group.
The new Act is very specific in terms of the conditions for expropriation, and, importantly, the protection of the “property clause” under Section 25 of the Constitution remains in place.
The Act, which replaces the outdated Expropriation Act of 1975, was largely expected by the property industry.
It has been in the works since 2018 and was passed by Parliament in March last year, the realtor said.
The concern is that expropriation has been sensationalised and conflated beyond the actual implications of the Act, Seeff said. Arbitrary property deprivation is specifically prohibited.
“While the Act provides for expropriation at nil-compensation, there are checks and balances contained in the Act. This includes that it must be in the public interest, and follow extensive consultation and negotiation with the courts having the final say if no agreement is reached.”
Seeff said further that Ppesident Ramaphosa and the ANC have also been firm in their commitment that no land grabs of whatsoever form will be tolerated.
“The aim is for expropriation to be lawful, and done with careful consideration so as to promote economic growth, development, and investor confidence.”
Seeff said that nil-compensation is also specifically confined to public interest.
Four potential scenarios are envisaged in Section 12(3), being (1) where land is held solely for speculative appreciation without productive use or development intent; (2) state land which is unused, and unlikely needed for future core functions: (3) abandoned land where, despite being reasonably capable, the owner has demonstrably relinquished control; and (4) where the market value of the land is less than, or equal to the state’s investment in its acquisition and improvement.
Seeff pointed out that the Act is also subject to the constitution, and it is expected that it will likely face rigorous legal challenges.
As for residential property, and having regard to the Zimbabwe experience, Seeff said that it never involved residential homes. Compensation has also since been paid for the expropriated farms.
There are also additional implications when it comes to residences such as the banks and mortgage loans over properties.
It therefore remains business as usual for the property market with the legal protections of private property in place. In fact, Seeff says the property market has started this year on a better footing compared to last January following three successive interest rate cuts which have hugely boosted affordability and confidence in the property market.
It is a new year, and many young professionals will be looking to get their foot on the property ladder, and what better time, he says. There is excellent value for buyers in the inland provinces, including Gauteng which usually sees the highest influx of first-time buyers in the country.
While the traditionally strong areas such as the Western Cape and coastal hotspots are expected to enjoy a good year, Seeff expects the Gauteng and inland markets to gain good momentum, and once stock levels start coming down, to see property values in those areas starting to rise meaningfully again.