A weak developed world economy is keeping emigration selling low‚ and Africa’s improving economic situation may have begun to increase the significance of African-driven foreign buying in SA‚ says John Loos‚ household and property sector strategist at FNB.
In the second quarter of 2012‚ the net foreign effect on the South African property market was virtually unchanged from the first quarter‚ and was significantly better than a year or so ago‚ Loos said on Wednesday.
With regard to outflows of South African homeowners‚ the estimated percentage of domestic sellers selling in order to emigrate was almost unchanged at 3.8 percent of total sellers in the second quarter‚ compared with 3.6 percent in the previous quarter‚ according to agents surveyed.
This is the sixth consecutive quarter that the sample of agents has estimated a percentage at near to 4 percent‚ and the level remains a far cry from the 20 percent peak of the third quarter of 2008.
“The ongoing slow rate of emigration-related selling is hardly surprising‚ given the weak economies and accompanying high unemployment rates in many parts of the developed world‚ especially the UK and Europe. By comparison‚ SA ticks along with a mediocre economic growth rate‚ no major debt crises‚ and with the additional ‘advantage‘ (from the points of view of skilled employees and entrepreneurs) of having a very significant skilled labour and entrepreneurial shortage‚” Loos said.
Simultaneously‚ the estimated number of South Africa expatriates buying property in SA hovers near 3 percent of total buying‚ according to agents‚ so there is no significant perceived change from quarter to quarter in this level either.
From a year ago‚ however‚ expat buying is believed to be very up from an estimated 2 percent of total buying‚ with 7 percent of respondents perceiving a higher level of expat buying since 12 months ago‚ 93 percent perceiving no change and 1 percent suggesting a weakening in expat buying.
“One needs to be cautious about reading too much into such small moves though‚ as the response to this survey question‚ since its inception‚ has typically shown little movement‚” he said.
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