Western Cape outperforms other provinces

The latest FNB Home Loans Property Barometer findings show the Western Cape outperform the other eight provinces in terms of its ability to attract repeat home buyers from other provinces.

The review draws on information emanating from FNB's Estate Agent Survey, as well as Deeds Office data analysis regarding repeat buyer inter-provincial migration trends.

About the positive findings in Cape Town, John Loos, FNB Household Sector and Property Economist says, "In economies that are services-dominant, such as South Africa, the ability to attract skilled labour is crucial, because skills drive such economies. As such, an indicator of a country or region's ability to attract and retain skilled migrants is arguably one useful indicator of a region's economic competitiveness."

"Looking at residential property transactions can provide an indicator of the competitiveness of SA's different regions. These indicators refer to the level of emigration-related selling of property, 'semi-gration'-related selling and foreign buying in the region."

"Although popular, Cape Town suffers a residential market mediocrity similar to other major regions currently, which is a function of a weak global economy and significant financial weakness in its household sector. However, when it comes to indicators of long term confidence in the various regions, Cape Town comes out generally better than the rest," says Loos.

The city has the second lowest emigration selling rate of the major cities, with 2.7% of total sellers selling in order to emigrate since the beginning of 2011, compared to the national average of 4%, according to the estimates of the sample of agents surveyed.

When it comes to sellers selling in order to re-locate to another part of SA (semi-gration), Cape Town is noticeably lower than all of the other major cities with a percentage of 5.7% (national average having been 8%). Agents' estimates of the number of foreign buyers of a region's properties, expressed as a percentage of total buying, show Cape Town having a higher percentage of foreign buyers than the rest of the major metros, i.e. 5% since early 2011.

Breaking it down by province, results found the Western Cape to have the lowest net outbound re-location rate of 10.7% of total repeat buyers (inbound repeat buyers minus outbound repeat buyers, as a percentage of total repeat buyers), followed by Gauteng with 14%, the two largest provincial economies. The smaller provinces had the worst rates of outbound migration, with the highest estimated to be Mpumalanga on 33.9% followed by the Northern Cape with 33.1%, which arguably speaks to a lack of economic opportunity in these provinces.

On a net migration basis (repeat buyers entering a province minus those departing) it was only the Western Cape that saw positive or 'net inward' migration to the tune of +9.7% of total repeat buying. Next best were Eastern Cape and Gauteng with slight 'net outbound' migration rates to the tune of -0.4% and -0.6% respectively.

Clinton Martle, FNB's Property Leader Strategist, based in Cape Town, says "The Western Cape 2011 net migration performance is very much 'more of the same', with the province having had the best net inward migration for the past decade or more. This should be a key source of long term support to the province's economy, providing it with the potential to have superior long term economic growth to most other regions."

Loos notes, "StatsSA estimates for the ten years from 2001 to 2010 show the Western Cape was one of the star economic growth performers, only slightly behind the top performing Gauteng , with an average annual real economic growth rate of 3.77%, compared to Gauteng 's 3.91%, making the country's two major economies the top two growth performers".

Loos adds, "While Gauteng 's net migration rate of repeat buyers is considerably weaker than the Western Cape, we suspect that it probably has a superior inward migration rate of first time buyers from other regions, made up of younger people starting out on their career paths. We believe this probably to be the case because Gauteng remains by far the largest economic region and thus the one with the greatest economic opportunities."

"The results of these findings have implications for the Western Cape region. In order to retain its net inward migration of repeat buyers and attracting skills and financial purchasing power, the province has to find ways to grow in an environmentally friendly way", notes Martle.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 16 Mar 2018
      Strange as it may seem, there is a stock shortage looming now in the luxury sector of the Johannesburg property market, because astute buyers have for the past few months been hurrying to snap up high-end homes being offered at excellent prices.
    • 16 Mar 2018
      No one likes having to claim but having insurance for your household contents is vital, and at the start of a new financial year, homeowners either applying for new household insurance or revising their existing insurance should take a comprehensive inventory of their possessions and keep track of the total value.
    • 15 Mar 2018
      First-time buyers typically need to save for at least three years to afford the deposit on a home, and the VAT and fuel price increases announced in this year’s budget are going to make it even more difficult for them to reach that goal.
    • 15 Mar 2018
      Sea Point shows how developers use these organisations to advance their own interests
    • 15 Mar 2018
      As the rand strengthens against other major currencies, the prospect of investing in properties abroad is an increasingly appealing option for South African investors. Several factors, local and international, are sending a clear message: now is the time.
    • 14 Mar 2018
      Selling a property is never easy. Subtle details – from mismatched scatter cushions, to an unswept kitchen – can spell the difference between a potential buyer making an offer, or scratching your property off their list altogether. As much as you would love to be around to hear the passing comments as buyers amble through your abode, by choosing to remain at home during a showing, you set yourself at risk of becoming exactly that “subtle detail” that gets in the way of an offer.
    • 14 Mar 2018
      Home design mirrors the world around us and the phenomena of global warming, fossil fuel depletion and natural resource scarcity have created a revolution in architectural concepts and design.
    • 13 Mar 2018
      It has long been a foregone conclusion that towns where markets are driven largely by the demand for holiday homes will always perform below the national average during subdued economic times, but a report released by FNB last month has revealed that this is no longer the case.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us