The household sector is cautious due to a number of years of slow economic growth, affecting consumer confidence. This is reflected in the home buying and selling activity of South Africans and the reasons behind their decisions. While there has only been a minor rise in financial stress-related home selling to date, the largest motive for selling remains the ageing segment of the household sector downscaling to smaller properties “due to life stage”, according to John Loos, FNB household and property sector analyst.
“A key indicator of perceived ‘relative opportunity’ between South Africa and other countries, for skilled labour, is the percentage of sellers selling in order to emigrate,” he said. “This motive for selling remains moderate, but has been elevated since 2013.”
Here’s why people sell
- FNB’s survey respondents in Q2 2016 indicated that “upgrade-related selling” accounted for 12% of total home selling. This represents a decline from the 14% of the previous quarter, and is now significantly lower than the 20% high reached late in 2013.
- The estimated percentage of sellers “selling in order to downscale due to financial pressure” was 14% in Q2 2016, mildly up from the 11% low of Q3 2015.
- Examining the FNB Estate Agent Survey by major metro region, the City of Cape Town would appear to be the city whose households are showing the most financial strength.
- The “selling in order to emigrate” motive for selling remains mildly elevated off its 2% low of late-2013, as one would perhaps expect in these times of increased domestic instability. However, at 4.6% of total selling in Q2 2016, that percentage has not gone “through the roof”.
- The strong growth in the 50+ age cohort’s numbers is reflected in the ongoing strength in selling “in order to downscale due to life stage”, which accounts for 26% of total selling.
- At 9% of total selling in the Q2 2016 survey, “selling in order to relocate to another region is slightly down from the prior quarter’s 10% estimate, but remains significantly higher than the 6% lows of the 2008/9 recession period.