FNB this week said the estimated rate of emigration-related home selling was virtually unchanged at 7.4percent in the first quarter following a prior multi-year rising trend that started in 2014 and left it “somewhat elevated”.
Emigration-related home selling is one of the eight key motives for selling homes.
The other motives are “downscaling due to financial pressure”, “downscaling with life stage”, “relocating to elsewhere in South Africa”, “upgrading”, “moving for safety and security reasons”, “change in family structure (death, divorce, etc)” and “moving to be closer to amenities”.
FNB household and property analyst John Loos said there had been an improvement in general sentiment in the first, indicated by the relatively solid performance of the rand compared to much of last year and the jump in the RMB-BER Business Confidence Index in the first quarter.
Loos said respondents to the FNB estate agent survey also perceived a major jump in “positive consumer sentiment” in the first quarter, with many attributing it to the recent political leadership change.
He questioned why there had not yet been a decline in the emigration-related home selling rate.
Loos said part of the answer was probably that there was something of a lag before the impact of improved sentiment on emigration-related selling became evident, particularly as emigration had a long planning phase for households.
“The relocation decisions of those first quarter 2018 emigration-related sellers were probably made a considerable time ago. We therefore still expect to see some decline,” he said.
However, Loos did not anticipate this percentage would recede just yet back to the 2percent low of late 2013.
“Although sentiment appears to be greatly improved in South Africa early in 2018, the economic performance of the country plays a key role in emigration levels.
“And while we anticipate a mildly improved real economic growth rate of 1.8 percent in 2018 compared to 1.3 percent in 2017, such a growth rate remains weak,” he said.
Loos added that emigration-related selling was fairly well spread across all four income areas early this year despite being highest in what agents termed the “upper income” area segment.
The four income areas are: high net worth areas with an average house price of R3.53m; upper income areas with an average house price of R2.81m; middle income areas with an average house price of R1.79m; and lower income areas with an average house price of R1.18m.
FNB said the high net worth areas returned an emigration-related selling estimate of 6percent of total selling but the slightly lower prices upper income area had the highest estimated emigration-related selling rate of 8.9percent.
Middle income areas recorded an estimated immigration-related selling rate of 6percent and lower income areas 6.6 percent.