PRETORIA – Financial stress-related selling of residential properties to emigrate continues to increase, according to FNB.
John Loos, a property sector strategist at FNB Commercial Property Finance, said the estimated percentage of sellers “selling to downscale due to financial pressure” increased to 16.3 percent in the third quarter from 15 percent in the previous quarter, which was noticeably higher than the 11 percent low in the third quarter of 2015.
However, Loos said it remained moderate compared to the 34 percent high reached in the second quarter of 2009 at the end of the 2008/9 recession.
Loos said the estimated percentage of these sellers who intended to “rent down” as opposed to “buy down” had increased noticeably to 65.6 percent in the third quarter from 40 percent in the first quarter of last year, possibly suggesting a significant deterioration in the confidence levels of these sellers as a group.
He said there had also been a gradual increase in the percentage of sellers selling to emigrate to 8.6 percent of total selling in the third quarter from 2 percent in the fourth quarter of 2013.
Loos said the current percentage of sellers selling to emigrate was “not yet extreme” compared to the estimated 20 percent in 2008, but this rising trend was a concern from an economic performance perspective.