We all know how expensive properties can get, especially along the Atlantic Seaboard in Cape Town in areas such as Camps Bay and Llandudno. But today it was reported that an open stand in Clifton has been sold for R11.25m.

Now to put this into perspective this is just a piece of land measuring 449 square metres and not actually a property with a lavish house. This is believed to be the highest price per square metre for a piece of undeveloped land in the South Africa property market (over R25000 per square metre).

The name of the person who has bought the property is not known to us yet but it is said to be an American investor and the investor had to fight of competition for this piece of land from other bidders. Now one has to wonder, what kind of an investment would this be? Is the investor going to actually develop this piece of land and then sell it off or are they just going to keep the land undeveloped for a couple of years and then sell it? There is a lot of money to be made in the property market today in South Africa if one plays their cards correctly and has access to the finance required to invest in the property market.

Now this also brings upon the question of foreign land ownership in South Africa. Should foreigners be allowed to own prime land in South Africa? The South African government is saying foreigners owning prime land in South Africa were materially influencing effective land reform. In essence, if foreigners own the land then that land can not then be used buy the government for land reform purposes. On the other hand if you look at the strength of the major currencies of the foreigners, most foreigners who are into the property investment arena look to South Africa as they can probably get more and better land purchasing in South Africa with their pounds or euros as opposed to them trying to purchase property in Europe or the USA with the same amount of money. Take for example this American investor who purchased the property in Clifton for R11.25m. In US dollars that is roughly US$1.7m. Chances are, with that amount of money they probably could not get a piece of land in the USA as the one in Clifton in terms of size and location. Clifton houses some of the most amazing houses in the world today and its location is prime for those seeking a beach front property with amazing views of the Atlantic Ocean.

My questions to you today, are property prices for prime properties in South Africa justifiable and should foreigners be allowed to own prime land in South Africa?

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