Land grabs have a negative effect on the economy and undermine property rights, this is according to Nedbank Group Economic Unit Senior Economist, Nicky Weimer.
Weimer says land grabs in particular areas are bound to have ripple effects for property owners.
“Ultimately it means that property as an asset is not really worth what it used to be. It has two ripple effects; one of them is that people will think very carefully before they buy property, where they buy their property, what is the possibility should it be empty before you complete your development, that you will be able to proceed with the development or would it be grabbed in the process. “
Earlier this week, Lenasia residents went on a rampage against the illegal occupation of land in the area’s vicinity. The residents are accusing the land grabbers of devaluing their property.
TI Homes Master Practitioner in Real Estate, Moegamat Ismail, says the bond owners’ concerns are valid. “If there are vacant areas in close proximity to the house I am selling, the value drops because people do not want to live close to a vacant land. If land grabbing has taken place, people will really be reluctant to buy.”
Listen below to Moegamat Ismail:
Weimer says land grabbing also has an impact on foreign investment. “From a foreign perspective, if you are a foreign developer or foreign business in a country and you sense that property rights are not as respected and not as protected by the law, you are not going to take that risk, because you stand to lose too much. So the impact on the economy is quite significant.”
Weimer explains that land grabs do not help in addressing economic issues facing South Africa.
“It really works against what South Africa needs, which is confidence, rising housing prices, new investment and job creation.“
Click below to listen to Nicky Weimer:
*This article was updated 27 July 2019*
