Western Cape property most popular with repeat buyers

The Western Cape continues to far outperform the other eight provinces in terms of its ability to attract repeat home buyers from other provinces and retain its existing homeowners, according to FNB.

FNB household and property sector economist John Loos said last week that this should not come as a surprise because the Western Cape's economy was the country's largest after Gauteng and had in recent years boasted the second-highest growth rate, exceeded only by Gauteng.

Cape Town and surrounding areas also had the benefit of a perceived high quality lifestyle compared with many of South Africa's other cities, he said.

'It is this combination of good economic opportunity, along with lifestyle, that appears to be proving to be the winning recipe in attracting both wealth and skills to the province,' he said.

Loos stressed that given that many people voted with their feet, studying migration patterns in South Africa could provide a good indication of household perceptions towards regions, economic opportunity, lifestyle or other factors.

He said the other three big provinces, Gauteng, KwaZulu-Natal and the Eastern Cape, had a net outward migration of repeat buyers.

Loos said this might not bode well for the future economic growth rates in these provinces but FNB believed these provinces still had a competitive advantage over the smaller five provinces despite not showing noticeably better net migration rates.

Loos believed a higher percentage of departures of repeat buyers from the larger economic centres were for non-work related reasons, such as retirement and lifestyle, particularly from Gauteng.

He said FNB's estate agent survey revealed that Gauteng had a much lower percentage of departures for work-related purposes, suggesting Gauteng lost less active skilled labour than might meet the eye.

In addition, it was believed that the larger economic centres, especially Gauteng, benefited more from inward migration of aspirant first-time buyers in the early stages of their working life than the smaller provinces.

Loos said these outflow levels showed a broad inverse correlation with relative economic growth rates of the previous five years from 2007 until 2011 and the four big provinces had noticeably stronger average annual economic growth rates than the smaller five provinces along with lower outflows of repeat home buyers.

'This should perhaps concern policymakers because while skilled labour outflows are probably caused by relatively weak economic performance, they can also sustain weak regional management and economic performance in the smaller economic regions,' Loos said.

(Business Report)

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