For many South African citizens, the thought of leaving our beloved country is unthinkable. However, a growing number of South Africans are choosing to emigrate overseas for a variety of reasons; the most common reason being a weak confidence in the current economic and political climate.
According to InterNations, an online international community for expats, the most prevalent reasons for South Africans emigrating are concerns over Government incompetence and corruption, a high crime rate, the deteriorating state of the economy, a growing unemployment rate and an increase in household/living costs.
John Loos, FNB property strategist, stated that the South African property market has seen an increase in emigration-related sales since 2013. Although the percentage was recorded as an unassuming 4.4% in Q4 of 2015, up from 2% in 2013, the category is being closely monitored. Consumer confidence is failing amidst a weakening rand, stagnating economy and mounting political unrest.
New World Wealth noted a sharp fall in the percentage of high net worth individuals (HNWI) living and working in SA in their South African Wealth Report for 2015.
According to the migration survey, NWW estimated that almost 1000 South African millionaires emigrated in 2015 alone; a significant loss to the economy in terms of future economic growth and skill improvement possibilities. The survey states that 36% of SA’s affluent individuals emigrated to the UK – more than double the percentage of those emigrating to Australia – with the States & Canada following close behind.
36% to the UK
15% to Australia
11% to the US
8% to Canada
5% to Mauritius
4% to Israel
In laymen’s terms, the business professionals and individuals making the highest contribution to the wealth of the country are taking their capital contributions elsewhere.
In relation to this, the Mail & Guardian reported that there has been a significant increase in the last few months in the number of SA citizens investigating and applying for foreign residency or citizenship. Unsurprisingly, given the circumstances, South Africans are seeking a safer environment, better education and more job opportunities. Hinting that a further increase in emigration-related property sales can be expected.
The internet hosts a wealth of information on where to emigrate and why. The Economist Intelligence Unit’s comprehensive annual report on overall liveability rates 140 cities according to 30 different factors relating to safety, healthcare, education, infrastructure and environment in the Global Liveability Ranking.
Australia and Canada top the list as the safest, most well-run and sought-after countries on the list;
- Melbourne – Australia
- Vienna – Austria
- Vancouver – Canada
- Toronto – Canada
- Calgary – Canada
- Adelaide – Australia
- Sydney – Australia
- Perth – Australia
- Auckland – New Zealand
- Helsinki – Finland
- Zurich – Switzerland
Real estate retains a top position as one of the most influential sectors in wealth creation in the South African economy, reinforcing its resilience despite economic and political pressure. Although the percentage of emigration-related property sales has not come close to the post-recession high of 20%, the increase has been noticed.
For the real estate sector, emigration translates to a rise in the number of sales stock on the market. Should homeowners wish to sell as quickly as possible, it could sit well for buyers looking to negotiate a better deal. However, homeowners hoping to sell at a sizable profit to assist in starting over in another country may find that the market is slower and less active than they’d like. Aspirant homebuyers are inundated with high levels of debt, bad credit scores, low expendable income and increased living expenses. In response, Banks are less likely to grant bonds, forcing a large number of potential buyers to remain in the rental market for longer than they’d hoped to, in effect, reducing the number of eligible buyers significantly and further slowing the market.
This said, the right property will always sell for the right price!
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