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Thursday Jan 31, 2013

Fewer property owners sell to move abroad

The estimated percentage of property sellers who sold their homes to emigrate dropped in the fourth quarter to the lowest level since early 2008 despite the recent turbulence in the economy and heightened investor concern about South Africa's future stability and prosperity, according to FNB.

But John Loos, a household and consumer sector strategist at FNB, stressed this week that this probably did not suggest the perceptions of domestic homeowners towards South Africa were "fine" and all the hype about negative sentiment was "overdone". Rather it was South Africa's "relative situation" in a troubled world that was perhaps not too bad.

"The current weak global economic times probably masks any changes in sentiment towards South Africa 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.

"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," he said.

The latest FNB estate agent survey revealed the percentage of sellers selling their properties to emigrate dropped from 4 percent in the second quarter last year to 3 percent in the third and fourth quarters.

Loos said this was the lowest estimated emigration selling percentage since a question on emigration selling was included in the survey in 2008.

Emigration-related home selling last year averaged an estimated 3.4 percent of total selling compared with 4.1 percent in 2011.

Foreign home buyers as a percentage of total buyers rose to 3.5 percent in the fourth quarter based on a two quarter moving average from 3 percent in the previous period. It was estimated at an average of 3.8 percent for the calendar year last year compared with 3 percent in 2011.

While this remained far from the highs of 6.5 percent in 2008, it was better than the 2 percent low reached in late 2010, Loos said. - Roy Cokayne

Business Report

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