Strong semigration push to W Cape, Gauteng

Cape Town - So-called "semigration" to the Western Cape from other parts of the country is going full steam ahead, John Loos, household and property sector strategist at FNB, told Fin24 on Thursday.

It mostly consists of mid- to high-income skilled people, who are already established in their career.

"The estate agents taking part in the FNB Estate Agent Survey indicated a strong semigration in the direction of Cape Town. It normally includes a significant number of retirees, but the biggest portion still comes for work," said Loos.

More retirees are leaving Gauteng than leaving the Western Cape, while the overwhelming number of those semigrating from the Western Cape go to Gauteng for work purposes.

"I believe Gauteng and the Western Cape will have better economic growth than other regions of SA in the long term. They will, therefore, attract more skills away from other regions," said Loos.

Those semigrating to Gauteng are often younger career-driven people, while those a bit older semigrate to the Western Cape for lifestyle reasons.

"Gauteng is still a skills magnet and has a much higher percentage of first time home buyers than the Western Cape. I still believe for the bulk of young people starting their careers Gauteng is still the place to be," said Loos.

Loos said those who are semigrating or even emigrating often do so for economic reasons, but he cautioned that one must not automatically assume that the grass is always greener on the other side.

He thinks the moderate increase in the emigration trend in SA could in part be due to the gradual rise in social tensions, resulting in concern about possible future political instability in the country. It can also be due to the economy which has stagnated since 2012.

READ: 'Semigration' the new emigration for some in SA

Loos pointed out that emigration seems to follow somewhat of a cyclical route. While it can be driven by households’ perceptions of the longer term future of the country, with recent years of heightened social tensions playing a role, it also has much to do with the economic cycle both in SA and abroad.

"Often people mistakenly think the grass must be greener on the other side - for instance in the UK or Australia. They forget that things like retrenchments happen there too," said Loos.

In his view the current higher trend of semigration and emigration from the Nelson Mandela Bay area in the Eastern Cape is probably due to the economy there being weaker than in Gauteng and the Western Cape.

"The post-2009 economic recovery brought about happier times in SA, and we saw the estimated emigration-related selling percentage falling all the way to 2% by the end of 2013," said Loos.

"Thereafter, however, it resumed a gradual rise through 2014 to 2016, reaching a higher, though still moderate by 2008 standards, 5.8% by the fourth quarter of 2016."

By 2014, when this gradual rising emigration selling trend began, economic growth had already been off its post-recession 2011 peak for two years.

"However, the 5.8% emigration selling percentage remains moderate compared to the 2008 levels. One of the key constraining factors may have been conditions in the rest of the world. While the global economy has been growing positively since the end of the financial crisis, it certainly hasn’t boomed," said Loos.

"This limits employment opportunities, and thus limits migration of skills towards those countries. In addition, home prices in many countries are at extremely high levels.

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