Emigration-driven home sales up

Emigration-driven home sales up

CAPE TOWN – Emigration-driven house sales and higher municipal residential development approvals have contributed to a 36 percent surge in houses for sale in the year to end September, compared to the prior year. 

An FNB Residential Property Barometer for September showed that flats and townhouses dominated the activity in the market during the period.

FNB property analyst Siphamandla Mkhwanazi said that the barometer also showed that emigration increased to about 15 percent, year-to-date, of all homes coming on to the market for sale, which was statistically “significant” considering it was double the figure of 3 to 4 years ago.

The data does not consider the reasons for this trend.

In the first quarter, the FNB Estate Agents Survey showed that emigration-driven sales accounted for 14.2 percent of residential property sales.

“There is still robust supply of new stock, as well as emigration-related sales. On the other hand, inbound demand (from foreigners buying property in South Africa as well as from South African expats buying property locally) remains comparatively subdued,” said Mkhwanazi.

RE/Max Estate Agents said in a statement that a US company, Pew Research, had found that the most popular destination for South African expats in 2017 was the UK, followed by Australia and the US.

The actual number of people emigrating are hard to come by. The FW de Klerk Foundation in August estimated that about 3 000 people were leaving South Africa each month.

The foundation warned that if the figure accelerated, it would result in serious consequences for South Africa's tax and skills bases.

Streso Financial Consultants chief executive Eric Streso said recently: “The last few months have left South Africans reeling. A volatile and unstable economy, concerns around government corruption, recently crime at an unsurpassed high and soaring prices, are leaving citizens disheartened and concerned about their future.

“Although there are no exact figures, it is clear that droves of skilled people are emigrating each day.” 

Mkhwanazi said the barometer showed that the residential property market was recovering, but house buying demand remained low.

The FNB Residential House Price Index third quarter growth edged up moderately to 3.7 percent, up from 3.4 percent in the second quarter.

“While price growth remains below inflation, mild improvements in demand and progressive mortgage lending have supported the residential property market in the third quarter of 2019. 

“However, depressed labour markets continue to weigh on household finances, which poses a threat to sustained demand growth,” he said.