Independent Online

Saturday, August 13, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Should we stay or should we go? Emigration conundrum for SA property owners

Emigration-related property sales could increase slightly as more countries reopen their borders. Picture: Michael Reichelt/Pixabay

Emigration-related property sales could increase slightly as more countries reopen their borders. Picture: Michael Reichelt/Pixabay

Published Feb 23, 2022

Share

Emigration-related property sales have remained stable over the past year but could start increasing now that some countries are reopening their borders.

The numbers, however, are not expected to reach the 2019 peak. Sales due to emigration have remained stable at around 8% of market volumes in recent quarters.

Story continues below Advertisement

However, FNB senior economist Siphamandla Mkhwanazi says this ratio increases to 14% in the R2.6 million to R3.6m category, and 11% in the price bracket above R3.6m.

While, overall, emigration-related sales have slowed since 2019, lower volumes in recent quarters might have been affected by global travel restrictions and possibly by the work-from-home trend.

“Emigration-related sales may well increase, as global travel restrictions are phased out, but it is unlikely that volumes will test the 2019 peak.”

​Read the latest Property360 digital magazine below

He attributes this to the fact that the cost of living is “rising relatively fast” in developed markets and might therefore dissuade relocation, and also because most South Africans who wanted to emigrate “have already done so”.

Story continues below Advertisement

“And being able to work from home is making it easier for South Africans to work abroad while still living here.

Sell or let?

While some South Africans are choosing to keep their properties when they emigrate and let them while they are living abroad, says Berry Everitt, chief executive of the Chas Everitt International property group, those who are genuinely emigrating do not want to hang on to their properties here.

Story continues below Advertisement

“Occasionally, we have clients who are leaving South Africa to work on an overseas contract for a few years and want to let their home until they return but, again, this is a very small number.”

He does not advise emigrants to keep their homes here.

“Our real estate market is buoyant at the moment, and sellers who work with a seasoned real estate professional to price their homes correctly should be able to sell within a matter of weeks, and perhaps within days,in areas where there is a shortage of supply.”

Story continues below Advertisement

Craig Mott, Western Cape regional sales manager for the Rawson Property Group, says most homeowners who are emigrating choose to sell their properties as, generally speaking, they emigrate financially, to avoid having to pay tax in two countries.

“They rather liquidate completely. We seldom have people who prefer to keep their properties in South Africa.”

In cases where they do choose to let their homes, Mott says they eventually settle in another country and, after experiencing the lifestyle and job scene for a few years, feel comfortable with selling their properties here.

Duane Butler, general manager for Seeff Randburg, says sellers leaving the country also prefer to sell their properties so as to not have the headache of managing them from far away.

“Often, those looking to emigrate need to sell because they will need the funds to settle elsewhere.”

​Read our Property360 digital magazine below

The push factors for emigration

Mkhwanazi says moving to a different country is often not an easy decision and it takes time.

“There are long processes involved, so while there may be trigger events, the actual emigration might happen months later.

“In our observation, emigration is largely driven by longer-term factors such as weak economic prospects and political instability.”

Everitt says emigration is also a “very difficult, stressful and often costly process” that usually involves a search for a new job or new business opportunities; getting work and business permits; deciding on a real estate investment or finding a rental home; obtaining temporary or permanent residence; moving a whole family to a new home and new schools; moving pets; shipping belongings and trying to fit into a different culture.“

“This is further complicated by having to comply with the unfamiliar laws of another country, trying to understand or assess documents and contracts in a foreign language, and considering what to do about your investments, insurance policies, bank accounts and taxes in South Africa.”

Samuel Seeff, chairperson of the Seeff Property Group, says generally South Africans do not want to emigrate and often do so as an “absolute last resort”.

They often go for family reasons, security or economic opportunity.

“What we do see is that many South Africans go overseas to work for a period of time – working as ex-pats rather than emigrating.“

In many instances, these ex-pats earn more than what they would locally and often invest in homes in South Africa.

“We see this on the Atlantic Seaboard but also in many other areas. They invest in homes, initially for holidays back in South Africa, but then with the long-term view of returning to the country.”

He says there has also been a notable uptick in South Africans obtaining second passports as a “Plan B”.

Stay here, invest in property overseas

As an alternative to emigration, says Andrew Golding, chief executive of the Pam Golding Property group, a number of South Africans are choosing to acquire property outside the country but not to leave or sever ties with it.

Many are looking to acquire EU citizenship through their property purchases to provide themselves and their children with opportunities to travel or work in Schengen Europe or spend part of the year overseas.

“Others are looking for sound offshore investment opportunities as a currency hedge.

“We believe the abolition of the requirement to formally financially emigrate is positive and it might well encourage people to hold on to properties in South Africa.”

He adds that there are increasing reports of South Africans living overseas but looking at buying property back home.

* Click here to find your dream home.

Share