25% more homeowners left the property market in 2021 compared to 2014, according to data evaluated by Lightstone.
Nearly 130 000 South African homeowners left the property market last year, selling properties valued at R200 billion at an average of R1.8 million per property – and the pendulum has swung towards younger homeowners opting out in greater numbers than before.
Head of Banking and Insurance at Lightstone, Mike Lehabe, says the 128 749 sellers are 25% more than the average from the between 2014 and 2020 and 27% more if 2010 is included.
“In the years 2014 to 2020, some 672 547 homeowners exited the market at an average of 96 078 a year. The average is significantly up on the 79 999 who sold and did not repurchase in 2010, the same year SA hosted the FIFA World Cup”, he says.
The profile of sellers changed significantly between 2010 to 2021, swinging from older to younger, and there are many potential reasons for this: tougher economic conditions, exacerbated by the pandemic, took their toll, forcing younger people out of their homes. Emigration could be a factor too, while some sellers may be waiting for prices to fall to buy at bargain prices. Then again, younger people are typically adopting a ‘live light’ philosophy, and this could also account for some of the shift.
Lehabe says while the impact of Covid-19 has obviously played a role in the market, attention is now shifting to the Russian invasion of Ukraine and the market is waiting to see its impact on the South African economy and how it might affect residential house sales.
In 2010 those leaving the market (see graph below) were predominantly in the older age groups, between 36 and 49 years of age (21%), 50-64 (35%) and the 65+ age group was the largest category at 44%. In 2021, this was significantly different, with 10% of sellers being in the 18-35 age group, up from 0% in 2010. The 36-49 group went from 21% to 28%, while the 50-64 age group dropped from 35% to 29% and the 65+ age group fell from 44% to 34%.
Those under 50 now account for 38% of sellers as opposed to 21% in 2010 with females making up most of the sellers in the 18-35 age group and again in the 65+ group, with males outselling females between 36-64.
Two fifths of those selling up come from Gauteng, with 24% from the Western Cape and 14% from KwaZulu-Natal.
Females make up most sellers in the 18-35 age group and again in the 65+ group, with males outselling females between 36-64.