New research from FNB shows the South African cities that people are leaving to move overseas or elsewhere in the country.
The report is based on the number of people who highlighted either emigration or ‘semigration’ as the main reason for selling their home.
According to FNB household and property sector strategist, John Loos, migration is something of a cyclical phenomenon in South Africa.
“While it can be driven by households’ perceptions of the longer-term future of the country, with recent years of heightened social tensions playing a role, it also has much to do with the economic cycle both in South Africa and abroad.”
Loos noted that the post-2009 economic recovery brought about “happier times” in South Africa, resulting in the estimated emigration-related selling percentage falling down to 2% by the end of 2013.
Thereafter, however, it resumed a gradual rise through 2014 to 2016, reaching a higher, though still moderate (by 2008 standards) 5.8% by the 4th quarter of 2016.
What’s causing people to leave?
The start of interest rate hiking was the main cause that set most peoples’ exoduses off, said Loos, though other things also factored in.
“It is probably unrealistic to blame all of the rising emigration-related selling trend on interest rate hiking,” he said.
“National Household Sector Confidence, as reflected in the FNB Consumer Confidence Index, had already become ‘soft’ since the start of the economic slowdown in 2012. But the start of interest rate hiking may have been that final straw,” he said.
FNB based its data on a two-quarter average for the final 2 quarters of 2016.
It showed that in four of South Africa’s five major metros, the emigration level was more or less identical with greater Joburg (5.3%), Tshwane (5.4%) and Cape Town (5.5%) – while Ethekwini at 4.7% also didn’t differ much.
The shock result came from the Nelson Mandela Bay region which showed a noticeably higher 7.2% emigration-related selling estimate.
Loos noted that the high-level was likely due to the region’s economy having performed more poorly than the other larger metro regions in recent times.
Semigration (Elsewhere in South Africa)
“Semi-gration” to and from regions can also be a useful indicator of a region’s economic performance as well as longer term confidence in that region, the report said.
During the 2008/9 recession, many households chose to stay in South Africa, with few new employment opportunities being created anywhere at the time.
Since then, this percentage has recovered to levels as high as 10% in the 1st and the last quarter of 2016. According to the overwhelming majority of agents, the main destination for these “semigrants” is the Western Cape region.
This can be seen by a noticeably low estimate of sellers selling in order to relocate away from the City of Cape Town Metro Region (3%) notes Loos.
It was once again the Nelson Mandela Bay municipality that provided the biggest shock however, with 17.7% of home-sellers indicating that they were leaving the area for elsewhere in South Africa.