Downscaling still major factor in SA home sales
The Third Quarter FNB Estate Agent Survey shows that financial pressure on home owners is still driving the house market. Agents estimate that 20 per cent of home sales result from downscaling due to financial pressures. Another 21 per cent of sellers are downscaling because of life changes (getting older). Only 16 per cent of sellers were feeling richer and selling their present homes in order to upgrade.
Estate agents categorized house sellers in the Third Quarter as follows:
- Downscaling due to financial pressure – 20%
- Downscaling with life stage – 21%
- Emigrating – 3%
- Relocating within SA – 7%
- Upgrading – 16%
- Moving for safety and security reasons – 11%
- Change in family structure – 15%
- Moving to be closer to work or amenities – 8%
Judging from the low number of those selling to emigrate (only 3 per cent), although 2012 has been a turbulent year politically and socially with widespread and violent strikes and service delivery protests, rand weakness and international credit downgrades, the residential property market has not yet been affected by a wave of panicking sellers.
The FNB survey shows the lowest emigration selling percentage since the start of this survey question at the beginning of 2008. The percentage of foreign buyers dropped slightly in the third quarter from 4 per cent to 3 per cent. On the other hand, foreign buyers from African countries are becoming more confident in SA property. Expressed as a percentage of total foreign buyers, foreign African buyers have increased to 21 per cent. This continues an upward trend. Loos believes that South Africa is likely to see further increases in the African foreign buyer percentage, as Africa’s economic fortunes continue to improve and its household wealth grows.