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Young families are looking to emigrate

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A “new wave” of emigration is sweeping through South Africa with emigration-related property selling reaching new highs.

In Q4 2017 FNB data showed that 7.3% of property sales were related to emigration. Almost two years later, in Q3 2019, this has more than doubled to 15.7% of total volume sales, says Siphamandla Mkhwanazi, senior property and consumer economist at FNB. And this volume has “not shown any signs of stabilising”.

Most areas are seeing an increase in listings – about 10% to 15% by people looking to emigrate, says Seeff Property Group chairman Samuel Seeff. Those who cannot emigrate are keeping the market “ticking over”.

“These buyers are largely ‘stuck in SA’ and are committed to staying and happy to buy. They are able to take advantage of the favourable mortgage climate but have no discretionary money.”

The upper end of the market, generally the R5 million to R10 million-plus sector are those with the means to emigrate, and are seemingly waiting and watching to see how things unfold.

“They are not buying property, or when they do buy, they are spending less. They are cautious and, considering that property is generally a 10 to 20 year commitment, want to see visible and significant change in the economy and political situation before committing,” Seeff says.

On the Atlantic seaboard, there is “definitely” a rise in emigration sells, including foreigners looking to sell, says Seeff luxury sectional title agent, Bryan Ginsburg. Similarly, Michele Apperley, full title agent for Seeff City Bowl says there is a definite increase in young families looking to emigrate.

“Often they rent out their houses if they cannot get it sold as they are not too keen to cut their prices just to sell.” The Constantia Upper area is also seeing an uptick in emigration selling, says Seeff agent Steven Holvec. While emigration is increasing, there has been a “rise” in investment from foreign buyers, especially African expats, Seeff says.

“These buyers are committed to the country and investing in homes, primarily in the suburbs in the R1 million to R3 million band predominantly.” Investment from buyers from the UK and Europe, however, has “declined notably over the last three years” from around 20% of sales on the Atlantic Seaboard to about 10% and possibly even less in real terms.

“In fact, it can almost be said that there are more foreign sellers than buyers this year,” he says. Ross Levin, managing director for Seeff Atlantic Seaboard and City Bowl says: “(This year’s) sales to foreign buyers are at some of the lowest levels in years…Although some of the decline can be attributed to the water crisis, the reality is that foreign buyers want to know that their investment is safe and that they will earn decent returns on their investment. The expropriation talk is not helpful because for many overseas buyers, Zimbabwe is a case study of what this will mean.”

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