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Wednesday Jan 30, 2013

Emigrants selling properties falls to low

The estimated percentage of sellers of residential property who are selling because of emigration reached a record low of 3 percent in the third and fourth quarters 2012 from 4 percent in the second quarter,the FNB Estate Agent Survey showed on Tuesday.

The question was first asked of estate agents in the first quarter of 2008 during the Eskom load shedding crisis.

Since then Eskom has kept the lights on‚ but the margin between available capacity and peak demand remains tight with for instance the margin on January 28 being only 6.3 percent compared with the international norm of 15 percent.

FNB household and consumer sector strategist John Loos said that the record low emigration percentage probably did not mean that the perceptions of domestic homeowners towards SA were fine‚ and that all this hype about negative sentiment was overdone.

In his view SA's "relative situation" in a troubled world that was perhaps not too bad.

"The currently weak global economic times probably masks any changes in sentiment towards SA‚ because even if a heightened number of domestic homeowners were feeling a desire to emigrate in recent times‚ job prospects in some of the traditionally popular emigration destinations are far from rosy‚ especially European destinations" he noted.

Financial times in economies such as Europe and the UK‚ from where a significant portion of SA's foreign buyers come‚ are currently tough‚ and that could conceivably be putting pressure on foreign buying‚ so improvements in this source of residential demand have been slow.

"According to the estate agent survey‚ however‚ one group which doesn't appear to be affected by recent tensions‚ is foreign buyers from African countries. Expressed as a percentage of total foreign buyers‚ the African contingent has increased further to 22 percent for the two quarters to the fourth quarter of 2012. This continues an upward trend in this percentage from a low of 8.5 percent back in the third quarter of 2010. Looking longer term‚ I believe that South Africa is likely to see further increase in the African foreign buyer percentage,as Africa's economic fortunes continue to improve and its household wealth grows too‚" he said.

"In short‚ therefore‚ with regard to emigration selling of local property we do not appear to be seeing any negative impact (increase) from recently heightened domestic tensions. But it is important to understand that our "brain drain" problem has probably not permanently subsided. In different (better) global economic times‚ the negative impact may have been far more significant‚ as was the case in pre-recession early-2008 during the Eskom load shedding period‚ when many feared that the 'lights were going out'‚" he concluded.

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