Downscaling for whatever reason – to reduce financial pressure or to secure a smaller, more suitable home for one’s old age – is still the prime generator of house sales in South Africa today.
Quoting a recent FNB report, Bill Rawson, Chairman of the Rawson Property Group, says that 15% of today’s home sellers are selling due to financial pressure and 22% are selling because they wish to downscale as a result of entering a new phase in life (in most cases retirement or preparation for retirement)
These figures, says Rawson, probably overlap with another figure – 11% of sellers are reporting that they are selling so as to live in safer, more secure environments, particularly gated estates and security villages and ten percent of sellers reported that the main reason for selling was that they wished to be closer to their places of work.
“What I found particularly encouraging about the latest figures,” says Rawson, “is that 18% of sellers are now selling to upgrade. During the 2008/2009 downturn, the figure fell to below 10% – people simply lost faith in property or could not afford to upgrade. The improvement here indicates a small but significant uptick in South Africa’s economic conditions and, it would appear, a growing belief in the ability of residential property to appreciate in value.”
Also encouraging, says Rawson, is that only 3% of home owners sold because they were emigrating. While this is probably due to the lack of work opportunities in such traditional emigration destinations as the USA, Canada, the UK, Europe, Singapore, Australia and New Zealand, which in previous boom years attracted as many as 15% of all South Africa’s home sellers, it also shows a new confidence in South Africa to scrape through and to provide jobs.
“All of these figures tie in with the various comments we have made recently on the economy and on the improvement in the residential market,” says Rawson, “and investors, whether buying for their own sake or to rent, can, I believe, gain confidence from these figures.”