Emigration, downsizing, better lifestyle, low interest rates – just a few of the reasons why homeowners are on the move, writes Gareth Bailey.
While there have been some recent sales due to emigration, according to Andrew Golding, chief executive of the Pam Golding Property group, the overwhelming majority of reasons for selling continue to be: relocation for a better lifestyle; upgrading to more spacious homes following the restrictions of the hard lockdown; relocation for business purposes or retirement; to be nearer to close family, or downscaling – due to lifestyle changes and in some instances financial pressure.
Coupled with these trends, one of the significant benefits of the prevailing low interest rates remains the large number of first-time buyers active in the marketplace. This is a positive trend for the country in general as home ownership and a growing middle class are key factors contributing to economic growth and stability. This has had a knock-on effect across the market, unlocking sellers – who were unable to sell – to both realise their own properties and utilise the proceeds to engage in a subsequent property transaction including buying-up which also unlocked additional upstream sellers.
Regarding emigration, in our experience, many people acquiring offshore property are not all necessarily looking to relocate or sever ties with the country. Instead, some are looking to acquire EU residency or citizenship in order to provide themselves and their children with opportunities to travel or work in the Schengen Europe, or spend part of the year overseas, while others are looking for sound offshore investment opportunities as a potential property and currency diversification. Notwithstanding this, the abolishment of the requirement to formally financially emigrate is positive. Furthermore, recently there have been reports of South Africans living overseas who are looking to buy property back home – an interesting trend to monitor.
As far as Covid-19 is concerned, we have not seen that this has prompted more people to consider relocating overseas. On the contrary, it has sparked a significant shift in circumstances, priorities and lifestyles triggered by weeks and even months spent more or less confined to home, which has prompted homeowners to make either new or long-planned changes to their living conditions. These decisions may in part be prompted by the marked deterioration in economic prospects resulting from the prolonged restrictions in business activity due to the lockdown.
Various additional trends evident in the marketplace include relocation to smaller and/or coastal towns – or “zoom towns” – as well as downsizing due to financial pressures or upsizing to satisfy the need for work-from-home space and more outdoor space. In this regard, we have seen a shift back to freestanding homes with garden cottages and/or additional room(s) for office purposes and an increasing demand for homes in secure lifestyle estates. We are however still seeing a good uptake of conveniently located sectional title apartments in desirable hubs or nodes in the various centres.
Furthermore, depending on how the pandemic and lockdown impacts, some families are choosing to live together to save costs, namely multigenerational living, others are relocating provincially – perhaps to a more relaxed lifestyle in a second-tier city.
This trend has been reinforced by the redevelopment of many of these former retirement and holiday towns, which have seen significant investments in medical, educational and retail facilities in these areas, making them more attractive to a young home buyer. Towns and villages offering the better quality of life which semigrants seek usually also offer more affordable properties – which improves the prospect that their property investment will be a profitable one.
Many of the semigrants have families, and are choosing to relocate their homes to ensure a better quality of life for their children and often greater security. Good schools and an outdoor lifestyle are thus key considerations when relocating. Often the breadwinner will commute back to Johannesburg or the relevant city during the week. For those opting to relocate to our KZN North or South Coast the commute is much easier than from Cape Town.
The rise of online working during the global pandemic has made the decision to semigrate more realistic and more appealing for a greater number of homeowners. The development of private medical facilities and schools, as well as good retail outlets, in many towns previously considered to be holiday or retirement destinations, has made a growing number of towns and villages even more appealing to potential semigrants.