While Semigrating has always been a relatively common and growing trend for many South Africans, FNB’s latest Property Barometer highlighted that buying activities in the affluent market dropped sharply in 2023 weighing on property values. In addition, semigration trend is normalising, providing less support to high-end property demand in coastal towns.
“Some high value segments, particularly in regions along the Western Cape coast, gained support from the semi-gration trend which now seems to be stabilizing. In addition, we’ve also seen sales related to emigration have slowed down, and anecdotal evidence suggests some low-level increases in South African expats buying local property in higher-priced segments,” said FNB Senior Economist Siphamandla Mkhwanazi.
While semigration is said to be steadying, it might continue to be a consideration and an aspirational goal for some, motivated by a perceived better quality of life including less congestion and a healthier outdoor lifestyle.
“With the rise in virtual offices and hybrid workspaces, days where geography restricts where you can work and live are long gone, and this continues to make semigration an appealing option for many”, says Hayden Giger, Growth Head, FNB Home and Secured Lending. “We’ve seen a large number of our Private Banking clients semi-grating over the last couple of years and have seen that while the decision can offer some substantial benefits for families and individuals, knowledge and preparedness for this decision is key.”
To ensure that you have a smooth inter-provincial transition, below are some key considerations one should look at regarding their property and options when considering moving:
- To sell or rent out your current property – Based on whether your semigration plan is to leave for a couple of years and return or to move and settle for retirement, consider what the best decision would be with your current property. Another consideration if you’re in a high rental demand area, might be to rather turn your current residence into an investment property as an additional source of income, with a longer-term investment view.
- Do your research on the housing demand for where you’re considering moving to – Semigration increases the demand for housing in smaller towns or coastal areas which may strain the supply and result in rising property prices. Make sure that you spend time researching your options and speaking to the relevant property experts in the areas you are looking at.
- Compare inner vs outlying coastal areas regarding property prices – Prices in the Cape Town metro area have already far outpaced growth in the other urban centres. This factor, coupled with the inclination to seek greater value in times of rising interest rates, is driving buyers to hunt for properties in outlying areas.
- Compare the overall cost of living – While property prices might be one appealing factor to move, it’s not just about property prices. Drawing a comparison in rates and utility costs, transportation, groceries, schooling, and entertainment expenses. A thorough cost overview will help provide a clearer picture of what you can expect financially, should you make the move.
Truth is as individuals and families choose to relocate from major cities to smaller towns and coastal areas, the economic landscape undergoes both positive and negative transformations. In alignment with the FNB Property Barometer, sentiment will be an important determinant of market outcomes, and subject to event risks such as the upcoming National Election outcomes.
“Property represents a stable investment which will grow over time and serve as a wealth creation tool for you and your family for future generations to come. If you are looking to semigrate in future, it is always worthwhile to consult experts who will be able to assist you in the process of turning your property into an investment and advise you on a strategy that will positively impact the growth of your portfolio,” concludes Giger.
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