Emigration is sapping SA house prices
Families leaving in numbers for other countries or the coast
● Emigration is sapping local property prices, with the numbers of people leaving SA for foreign shores at a 10-year high, and Gauteng the province most negatively affected.
Emigration sales account for 13.4% of all sales in the second quarter of this year, also representing a 10-year high, says FNB.
“While emigration sales are highest for the upper-income groups, there has also been an increase in the middle and lower price bands,” PGP CEO Andrew Golding said at the release of the Pam Golding Properties Residential Property Report for 2019 this month. “We believe the sales in the middle and lower price bands due to emigration could reflect people selling their investment or holiday homes.”
Herschel Jawitz, CEO of Jawitz Properties, says low consumer confidence has impacted far more negatively on discretionary buying at the luxury end of the market, while the lower and mid-market are relatively active.
Jawitz says the lending environment offers buyers the best opportunity in the past 10 years to buy a home. He says about 10% of sales in his company’s portfolio are from South Africans emigrating and expatriates moving back to their home countries.
This trend is confirmed in other quarters. Karen Cook, a director of executive search company Search Partners International, says it has seen a mass exodus of people looking for work overseas this year.
“Very few people are focusing on a move to Europe,” she says. “It’s mostly about the US and the UK, and New Zealand is very much top of mind. Interestingly, Canada is often considered but not currently a target market.”
Cook says whereas it has traditionally been an exodus of white executives looking for global mobility, now it’s an exodus involving black executives, too.
“In the past we’ve always had a lot of foreign expatriates come to our shores and fall in love with the quality of life and standard of living and want to remain in South Africa post their secondment, but we’re not hearing those conversations as much as we did.”
The phenomenon of South African executives who take up posts globally being given a mandate to “bring South African teams along with them” also poses a huge threat to an already depleting brain drain, she says.
Charles Luyckx, CEO of moving and relocations company Elliott Mobility, says the number of people moving overseas has increased by about 20% on last year. Most people are going to New Zealand, he says.
“The demographics of people leaving has changed over the last few years as well and we’re not seeing a steady number of people coming into the country,” he says.
There has been a reduction in the number of companies bringing employees into the country and fewer South Africans are returning from overseas.
Sharon Yerman of New Zealand Migration Services says the business is the busiest since it began in 1994.
“Australia has tightened up its entrance requirements and the amount of employment available in New Zealand is astounding,” she says.
There is a need for skilled migrants across the board. New Zealand is experiencing the lowest unemployment rate in its history — just under 4%. Teachers are snapped up, and there’s a need for skilled migrants including artisans, engineers and IT professionals.
“New Zealand welcomes migrants, because they know they can’t survive without them,” says Yerman.
“Semigration” is also knocking Gauteng property prices and has played a significant part in the growth of the Cape Town and the Western Cape property market for years. Some of this interest has shifted to the Garden Route and KwaZulu-Natal’s north coast on the back of the drought, says Golding.
Coastal properties are coming into their own as people buy more homes as primary residences in coastal towns that were traditionally holiday or retirement homes.
Areas such as Ballito and Knysna, as well as St Francis Bay, Port Alfred and Jeffreys Bay, have become primary residential areas. The area from Durban north to Ballito, as well as Western Cape towns in the Boland and Overberg, are also benefiting from this trend.
Karen Taylor, a consultant at Harcourts who’s been in real estate in Port Alfred for 12 years, says the past three years have been phenomenal for property sales. The town is attracting prospective buyers from the bigger cities as they want to get away from the crime and traffic, she says.
Families are also relocating to the town because of access to good schools in the area and nearby Makhanda. The R72 has been upgraded “and we have gone from having one traffic light to five, so there is definitive growth in Port Alfred”.