FNB has published its latest property barometer for South Africa, showing some of the key reasons why South Africans are selling their homes right now.<\/p>\n
While most homeowners plan to sell to downscale due to financial pressures, FNB said that a number of people are also looking to sell their homes to emigrate.<\/p>\n
The barometer shows that the key reason for home sales is due to financial pressure, with as many as 20% of people planning to sell to downscale or for affordability reasons.<\/p>\n
By comparison, around 8% of people are selling their homes with plans to leave the country. Notably, the data shows that wealthier South Africans – even those in upper-middle-income brackets – are more likely to sell up to emigrate.<\/p>\n
As many as 14% of home sellers in the R2.6 million – R3.6 million house price bracket are selling to emigrate, with this figure dropping to 11% in the R3.6 million+ house band.\u00a0 Emigration-related sales in South Africa increased steadily between 2015 and 2019, rising from 5% of total sales in 2015 to a record-high of 13.4% in Q2 2019.<\/p>\n
This number subsequently dropped to around the 8% mark in 2021 due to a confluence of factors, including international restrictions and a strong property market. However, this is up a percentage point compared to the Q2 2020 report.<\/p>\n
Market sentiment<\/strong><\/p>\n Market strength indicators show that growth in demand has moderated, but market volumes are still running above pre-pandemic levels, FNB said.<\/p>\n “Deeds data, supported by internal applications volumes, shows that mortgage approvals in the first 9 months of 2021 were approximately 34% higher compared to the same period in 2019<\/p>\n The resurgence in market volumes was more pronounced in the affordable segments, following a more severe decline in 2020 due to the harsher impact of the pandemic on lower-income households.<\/p>\n Lower-income buyers tend to be more sensitive to economic shocks, FNB said. It added that\u00a0prior to the pandemic, the more \u201caffordable\u201d segments were experiencing a faster-paced growth in demand compared to all the other price segments. Thus, the surge also reflects the continuation of that trend and would have been fuelled by ultra-low interest rates.<\/p>\n In line with improved activity, average time properties spent on the market for sale shortened to 7 weeks and 6 days, from 8 weeks and 6 days in the previous quarter.<\/p>\n “The slow recovery in the labour market, combined with rising interest rates suggests a less supportive medium-term environment for home buying activity.<\/p>\n “However, if sustained, the ongoing shifts in housing needs, which has lent support to homeownership, could mitigate the impact,” it said.<\/p>\n
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