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Property Talk

Property Talk

Author: Andreas Wassenaar
Date: 2016-04-29
The reason why people sell their residential properties is of particular interest to estate agents. The recently published FNB Home Selling Estate Agent Survey investigates 8 key reasons for selling and the results of the survey provide some insight into the current property market cycle. These reasons ranked in order of importance in terms of the percentage of total sellers are as follows:

1. Downscaling due to life stage (26%). This implies that the ageing section of the homeowner population is the single biggest driver of selling. The current rating is a little down on the 2nd quarter of 2015 high of 30%, but still considerably higher than the low of 12% experienced during the 2008/9 recession.

2. Change in family structure (15%). This reason relates to things like divorce, death or disease within a family that requires the sale of a property. This reason has been steady between 12% and 16% over the past 9 quarters.

3. Selling in order to upgrade (14%). The current percentage represents a decline from the 15% of the previous quarter and a more noticeable decline from the 20% high recorded in 2013.

4. Downscaling due to financial pressure (13%). This is an important one to watch as it provides a key sign of a deteriorating property market. The current figure is a slight improvement on the 14% recorded in the previous quarter. However the downward trend that started after the peak of 34% in 2009 seems to have now come to an end.

5. Relocating within South Africa (10%). This can usually be motivated by work related decisions, but also by retirement decisions and life-style related decisions. Our greater Ballito area is benefitting from a significant semi-gration from Pretoria and Gauteng as families search out areas to live and work that provide a better lifestyle. The new King Shaka International Airport has been a major catalyst for this. Relocating tends to be lower during times of economic contraction due to the costs associated with moving, and the current 10% is up from a low point of 6% recorded in 2009.

6. Moving for safety and security reasons (10%). This has been a reason for the success achieved by our many gated estates along the Dolphin Coast and seems to be steady between 10%-12%.

7. Moving to be closer to work or amenities (7%). This figure is down from a peak of 10% reached in the 1st quarter of 2014. As economic conditions tighten this reason to move tends to decline.

8. Emigrating (5,5%). Given the recent political instability and the sharp depreciation of the Rand exchange rate, an increase in this reason was predictable. Although at 5,5% this reason is the lowest amongst the 8 provided, it is significantly higher than the recent low of 2% reached in 2013. For those that can remember the chaos of 2008 that Eskom precipitated with the introduction of load shedding and the global financial crisis made itself felt on our shores, a peak of over 20% was reached in late 2008 as people sold in order to emigrate in large numbers.

Fortunately the Dolphin Coast is a national hotspot of growth and development and can therefore be expected to expand, even as many other areas in the country stagnate.

For further information and an interactive analysis of this article follow my blog: andreaswassenaar.blogspot.com.

Andreas Wassenaar

Principal - Seeff Dolphin Coast

Cell: 082 837 9094

andreasw@seeff.com