More middle-class and wealthy people are selling their homes to leave South Africa

 ·22 May 2022

The latest property barometer for South Africa, published by FNB  highlights some of the key reasons why people are selling their homes right now.

The data shows the key reasons for selling have largely remained unchanged over the last quarter, with most homeowners planning to sell to downscale due to financial pressures, while a number of people are also looking to sell their homes to emigrate.

The barometer shows that the key reason for home sales is due to financial pressure, with as many as 18% of people planning to sell to downscale or for affordability reasons.

By comparison, around 9% of people are selling their homes with plans to leave the country. Notably, the data shows that wealthier South Africans – those in upper-middle-income brackets – are more likely to sell up to emigrate.

As many as 15% of home sellers in the R2.6 million – R3.6 million house price bracket are selling to emigrate. A similar 15% figure was reported in the R3.6 million+ house band.

The data is taken from estate agents surveyed by the lender.

In the second half of 2021, agents noted that the reason for selling was broadly unchanged over quarters three and four –  sales due to financial pressure were at an estimated 20% of the market, while emigration-related sales were around 8%.

This ratio increased to 14% and 11% in the R2.6 million – R3.6 million and the >R3.6 million segment.

This data aligns with a report from New World Wealth and Henley & Partners showing that South Africa has continued to lose high net worth individuals (HNWIs) overseas.

The report focuses on high net worth individuals (HNWIs) with a wealth of $1 million (R16 million) or more. Total wealth refers to the private wealth held by all the individuals living in each country. It includes all their assets  – including property, cash, equities, business interests – less liabilities.

The data shows approximately 4,500 HNWIs have left South Africa over the past decade. Most of these individuals have gone to the UK, Australia, and the United States.  New World Wealth said that significant numbers have also gone to Portugal, Switzerland, Israel, Mauritius, New Zealand, the UAE, Canada, Monaco and Malta.

“In particular, a large number of South African billionaires have left the country over the past 10 to 20 years. Notably, there are 15 South African born billionaires globally, but only five of them still live in South Africa.

“It should be noted that South Africa is by no means alone in losing wealthy people. All the BRICS countries have lost large numbers of HNWIs to migration over the past decade. Egypt, Turkey and Nigeria have also lost a substantial number.”

Read: The university degrees and subjects to study to become a millionaire in South Africa

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