Diversity and value in Africa's real estate. Challenges facing property development in South Africa
| DOI | https://doi.org/10.1108/14635780710720144 |
| Published date | 13 February 2007 |
| Pages | 7-22 |
| Date | 13 February 2007 |
| Author | M.S. Ramabodu,B.G. Kotze,J.J.P. Verster |
| Subject Matter | Property management & built environment |
Diversity and value in Africa’s
real estate
Challenges facing property development in
South Africa
M.S. Ramabodu, B.G. Kotze and J.J.P. Verster
University of the Free State, Bloemfontein, South Africa
Abstract
Purpose – The purpose of this paper is to demonstrate the diversity of property investment in
South Africa.
Design/methodology/approach – The paper addresses how diversity and such factors as the
country’s history, government, different cultures, housing needs, vast rural areas, fast developing
cities, black empowerment and international interests, influence property potential.
Findings – The challenges faced in South Africa are, in many respects, a consequence of the
dramatic political changes that have taken place during the last ten to 15 years.
Originality/value – The paper highlights the influence of the transformation of the South African
landscape on real estate and presents current and future opportunities related to property.
Keywords Real estate, Property, South Africa,Investment, Government
Paper type Research paper
Historical perspective of property development in South Africa
The development structure presently discernable in South Africa is correspondingly
the result of a socio-cultural and economic history and a reflection on a particular
political thought pattern. Physical developmental study necessarily reflects on the
historical in order to develop a perspective regarding the problems and challenges of
the time, specifically relevant to Southern Africa. The historical course of development
in South Africa passed through clearly discernable phases. These phases may be
summarised as follows:
(1) Colonialism. The influence of English, French, Dutch and German immigrants
is clearly visible in a variety of fields and in buildings in particular. The British
heritage towards the developmental history is important. Colonialism, however,
also set the stage for the fight for freedom towards the nineteenth century, the
Republic of South Africa in 1960 and the democracy of 1994 (Hartdegen, 1988).
(2) Apartheid, isolation and culture grouping. After government take-over in 1948 a
clear tendency towards isolation between the groupings supporting and
opposing the established government body existed. The heritage of the
government during the period 1948 to 1994 will be recognised by the upliftment
of the “poor white”, the nationalisation of the Afrikaner and the Afrikaans
language, and the physical structuring of the policy of separateness which lead
to the “struggle” from 1960 to 1993 (Hartdegen, 1988).
(3) Internal unrest. Unrest usually developed from the isolated ranks and was
encouraged by a nationalistic force. As specific groupings gained support and
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Diversity and
value in Africa’s
real estate
7
Journal of Property Investment &
Finance
Vol. 25 No. 1, 2007
pp. 7-22
qEmerald Group Publishing Limited
1463-578X
DOI 10.1108/14635780710720144
later gained majority support, increasing opposition to the established order
developed, sometimes changing into violent resistance, which contributed to
unrest and influenced the stability of the country, the region as well as long
term business and investment confidence (Hartdegen, 1988).
(4) Democracy, take-over of power, change, reform and development stimulation.
Where groupings gained majority support, a take-over of power often occurred
accompanied by stagnation in mental attitude regarding the underlying
problems among the group in power. After the take-over a clear phase of reform
and stimulation of development followed. The process occurred repeatedly.
Each of these phases took place over several decades, and still currently taking
place under the democratic government. Each phase also has a clearly
discernable heritage in the physical developmental structure, which, as a whole,
reflects the culture of a period. The cultural heritage of the early tribes, Dutch,
French, German and English immigrants are clearly visible in a variety of fields
and in buildings in particular (Bizzell, 2002).
South African Government control in real estate
The degree of government participation in property varies according to the chosen
political ideology of a country. Schedule 3 of the constitution of the Republic of South
Africa (108 of 1996) makes provision for a multi-party democratic dispensation with
regular free elections, to which members are appointed on a proportional basis of a
national vote between parties. The constitution also makes provision for a tri-level
government dispensation, divided into a central, regional or provincial, and local
authority.
For the first time in the history of South Africa, the present constitution provides a
franchise for all population groups and therefore a democratic dispensation. In
addition, government moved away from the centralised dispensations to a greater
degree of federalism with extensive powers transferred to the second and third levels of
government. Where the previous constitutions were characterised by the exclusion of
certain population groups on the basis of race, South Africa may now, for the first time
in its history, boast a true democracy with the advantage that more people are active in
the property market.
Surveying and mapping
The South African system of land ownership considers it essential that an owner
enjoys the security of a title deed, with the protection of all rights pertaining to it.
According to the Surveying Act of 1927 (Cloete, 1999, p. 32), all surveys relating to land
are investigated by the Surveyor General. All land issues are noted and plans are
updated to show new subdivisions, servitudes, etc. All field notes, plans, maps and
other relevant matters are stored in the offices of the Surveyor General. The
Trigonometry Surveying Office which was established in 1920, is responsible for an
integrated system of control points on which surveying in South Africa is based.
Registration of deeds
The system of systematic land registration dates to the early days of 1652. Ordinance
39 of 1828 states that the registration of deeds must be registered and certified in a
registrar’s presence. Presently there are registration offices in Pretoria, Cape Town,
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