The Grass isn’t Always Greener…

Private Property South Africa

Over the past few years there have been numerous, occasionally controversial reports regarding the number of South Africans who have decided to ‘up sticks’ and move to another country. Reports suggest that between 600 000 and 840 000 South Africans have left the country since 1995, many of whom have cited violent crime, BEE, infrastructural decay and better foreign job opportunities as their reasons for doing so. Unsurprisingly, the UK, America, Australia, New Zealand and Canada are the countries of choice for the majority of expats. But the tides may be changing somewhat.

According to FNB, the estimated percentage of home sellers who sold their homes to emigrate dropped in the fourth quarter of 2012 to their lowest levels since early 2008 despite on-going strike action in the labour sector and a sharp drop in investor confidence.

Positive though this may seem John Loos, a household and consumer sector strategist at FNB points out that this probably does not suggest that domestic homeowner perceptions towards South Africa are “fine” and that all the hype and negative sentiment is “overdone”. He believes it is in fact South Africa’s “relative situation” in an unstable global economy that is preventing locals from emigrating.

Says Loos: “The current weak global economic environment probably masks any changes in sentiment towards South Africa because even if a heightened number of domestic homeowners were feeling a desire to emigrate in recent times, job prospects in some of the traditionally popular emigration destinations are far from rosy, especially European destinations.”

Touching on the topic of ‘brain drain’ which is traditionally associated with South Africa’s emigration statistics, Loos adds that it is important to understand that South Africa’s problem in this regard has probably not permanently subsided either. Indeed, he believes that in better global economic times the loss of skilled people in 2012 would have been far more significant as was the case in pre-recession 2008 during the Eskom load-shedding period.

Skilled South Africans such as engineers have been snapped up over the years by countries like Australia. Putting this in context, Edwin Dreyer, CEO of Thos Begbie, a South African based furnace component engineering company said towards the end of 2012 that there are now so many South African engineers residing in Australia that meetings in Perth or Melbourne are sometimes conducted in Afrikaans.

Said Dreyer: “South Africa’s loss is Australia’s gain.” He added that the fact that South Africa is not retaining the expertise needed to mine the country’s own minerals and process them in an “unmitigated disaster” and that . He added that South Africa’s engineers are still being recruited by companies in Australia, Canada and other major mining countries.

Brain drain aside, the latest FNB estate agent survey shows the percentage of sellers selling their properties to emigrate dropped from four percent in the second quarter last year to three percent in the third and fourth quarters. Loos says this was the lowest estimated emigration selling percentage since a question on emigration selling was included in the survey in 2008. The upshot is that emigration related home selling averaged an estimated 3.4 percent of total selling compared with 4.1 percent in 2011. Suffice to say it will be interesting to see what the statistics will reveal when the global economy improves once more.

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