Emigration selling in SA residential market may be subsiding

EMIGRATION selling may be declining in the residential property market, the latest FNB Residential Property Barometer showed on Monday.

According to FNB, estate agents were of the view that the percentage of sellers selling in order to emigrate had declined significantly from 20 per cent in the previous quarter to 14 per cent in the final quarter of 2008, ‘this following a steady rise since late-2007.’It was believed that ‘heightened nervousness following the ANC leadership change at Polokwane had been the key driver of heightened emigration selling, and this decline may be the first sign of a return to lower levels of skills leaving the country.’Should this be the start of a downward trend in emigration selling, it would not only provide support for the property market but for the economy as a whole, the survey found.The overall indicator of the FNB Residential Property Barometer – a quarterly view of the South African residential property market – has shown a positive shift, rising from 4,1 in the third quarter of 2008 to 4,6 in the fourth quarter 2008.According to John Loos, property strategist at FNB Home Loans, ‘seasonality may have played a role in the slight increase in the fourth quarter of 2008 activity level.’However, some of the headline trends where seasonality does not play as much of a role also showed a quarterly improvement, he said.The four headlines trends included time property remains on the market; the selling price of property; first-time entrants into the market; and the buy-to-let market.The length of time property remains on the market had shifted, Loos said.In addition, a slightly smaller percentage of sellers had to drop their selling price. First time buyers were reported to have become a more significant part of the market in the fourth quarter, he added.However, the fourth headline trend showed indifference.’The buy-to-let market showed no sign of turning for the better,’ Loos said.However, he said the drop in emigration selling was extremely good news.’Over time minority groups should come to terms with the leadership change, something which is a normal part of democratic societies.’Loos said that 2009 might even see a surge in expats returning to South Africa, ‘accompanying a drop in emigration, driven by a very weak job situation in many developed country as the economic crisis deepens.’Loos said that overall the FNB Residential Property Barometer showed early signs of property demand strengthening. ‘The household sector’s debt situation has begun to improve as interest rates start to decline and the debt-to-disposable income ratio follows a downward path,’ he said.’However, we don’t expect any fireworks, as the big negative factor (that will work against the positive impact of lower interest rates) for residential property in 2009 will be the weak global economy and its negative impact on economic growth via South Africa’s export-driven sectors.’While the residential and new mortgage loan demand were expected to recover gradually as 2009 progressed, national house price inflation was only expected to resume in 2010. – Nampa-Sapa