The Financial Action Task Force (FATF) decision on October 24, 2025, to remove South Africa from its "grey list" of jurisdictions under increased monitoring is a victory for the country’s financial reputation.
But for the property sector, this moment is not a collective sigh of relief—it is a clear signal that the rigorous new standards introduced to achieve the exit are now the permanent cost of doing business.
Real estate, globally, is a high-risk sector for money laundering. Consequently, the property industry—including estate agents, attorneys, conveyancers, and trust service providers—has been central to the government's efforts to comply with the FATF’s 22-point action plan.
Here is what the delisting means for the sector, shifting from the potential negative impacts of the grey listing to the permanent operational reality of the new financial compliance framework.
1. The Investor Confidence Dividend
The most immediate and significant impact of the delisting is the boost to investor confidence and the economy at large.
• Attracting Foreign Direct Investment (FDI): The grey listing had acted as a deterrent, signalling enhanced risk and complexity for international capital. Its removal effectively lowers the “risk premium” associated with South African assets. This should lead to increased interest and capital flows from institutional and private foreign investors into commercial, industrial, and high-end residential property, potentially stimulating development and stabilising valuations.
• Reduced Transactional Friction: Foreign banks and investors were often required to conduct expensive, time-consuming Enhanced Due Diligence (EDD) on all South African counterparties. While some internal due diligence will remain, the mandatory, global-scale EDD triggered by the grey listing is now expected to ease, making cross-border property transactions faster and cheaper.
2. Validation of the Current Compliance Framework
The achievement of delisting provides a powerful affirmation of the compliance efforts across the sector.
For Divan Fourie, Tech Partner at Spectrum Realty, the FATF exit is proof that the extensive work done by accountable institutions has paid off.
“This delisting is not luck; it's validation that the hard work put into strengthening our FIC Act (FICA) plans and Risk Management and Compliance Programmes (RMCPs) actually works,” says Fourie. “It demonstrates that the industry’s heightened due diligence, better Beneficial Ownership (BO) verification, and improved suspicious transaction reporting—driven largely by the Financial Intelligence Centre (FIC)—were the necessary medicine for the financial system.”
Fourie emphasises that the success should be a motivation, not a moment to relax. “We are absolutely not out of the woods. The test now is to sustain this effectiveness. We have to keep this intensity up to ensure we maintain our new status. Now is precisely not the time to slow down on the compliance bit; it’s the time to enforce it consistently and flawlessly.” 3. The Permanence of Stricter Compliance
The measures implemented to secure the delisting—including the amendments to FICA—are here to stay. These measures represent a necessary evolution toward a robust and transparent financial ecosystem.
A. Unwavering Focus on Beneficial Ownership
The ability to track the ultimate, natural owner of a property was a major weakness identified by the FATF. The sector must now operate with absolute transparency regarding ownership structures.
• FICA and the Beneficial Owner: Estate agents and other accountable institutions must diligently identify and verify the Beneficial Owner (BO)—the natural person who ultimately owns or exercises effective control over a property-purchasing entity (such as a company or trust).
• Access to Information: Practitioners must continue to collaborate with the new central BO registries to ensure the information they hold on clients is accurate and up-to-date. There can be no tolerance for opaque structures designed to hide ownership.
B. The Risk-Based Approach (RBA) is Law
The RBA requires practitioners to assess the level of money laundering risk posed by each client and transaction and apply Customer Due Diligence (CDD) measures commensurate with that risk.
• Enhanced Scrutiny: Transactions involving Politically Exposed Persons (PEPs), complex cross-border funding, or purchases by entities with layered structures will continue to require heightened and ongoing due diligence.
• Suspicious Transaction Reporting (STR): The requirement for vigilance is higher than ever. Practitioners must be empowered and willing to promptly file Suspicious Transaction Reports (STRs) and Unusual Transaction Reports (UTRs) to the FIC.
The reward for continued compliance is a cleaner, more stable, and more attractive market. The penalty for non-compliance remains severe, with massive fines threatening the viability of any practice that fails to uphold its fiduciary and legal duties. South Africa has achieved a major milestone, but sustained success requires the property industry to remain fully committed to its compliance duties.