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Gauteng housing market the one to watch

Looking through the looking glass

The latest 2017 FNB Inter-provincial Repeat Buyer Migration study shows 2017 to have been another year of increase in the rate of inter-provincial migration relative to overall repeat home buying. From 15.9% of total repeat property buying being estimated to be inter-provincial repeat buying in 2016, the estimate rose to 16.2% in 2017. This is now significantly higher than the 6.2% lows reached around 2009/10 just after the last recession.

The Western Cape still had the strongest net inflow of repeat home buyers of any region. However, its net inflow was significantly weakened from the 13.7% in 2016 to 8.4%, while Gauteng’s had started to improve markedly off a weak base, improving its net outflow of repeat home buyers from -6.9% of its total repeat buyers in 2016 to a lesser -3.4% in 2017.

2018 is likely to see more improvement for Gauteng, and weakening in the Western Cape, the latter province being hampered by significantly worse home affordability along with a severe drought. Gauteng of late experiences a relatively affordable housing market, driving very strong recent first time buying and, perhaps, beginning to persuade a greater number of aspirant “semi-grants” to the Western Cape region to stay where they are at least for the time being.

These latest repeat buyer migration figures contribute in part to expectations that the Western Cape housing market could underperform in 2018, while Gauteng could be heading into a significantly stronger property period, and may yet become the outperforming region.

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