Wording – Chrissie JohnsonAs we enter the promising horizon of 2024 it is heartening to note that several reports from tax specialists (Tax Consulting SA Dec 2023) are highlighting the fact that there has been an increase in expats returning to South Africa, as well as a growing number of South Africans who once left local shores that are now contemplating a “return to their roots”.
According to Tax Consulting SA, the upswing in the number of enquiries is attributed to diverse factors, including lifestyle preferences, cost of living considerations, a yearning for family and friends, and concerns about global conflicts in the Ukraine and Middle East. Furthermore, the allure of affordable luxury home ownership in South Africa, a feat challenging in many other overseas markets and popular emigrant destinations, is attracting both returning residents and expats.
Supplementary property reports surveys carried out in Gauteng and Cape Town (Businesstech News) indicate that South Africans of all ages who have been living and working abroad are now returning take up new corporate jobs or to establish new businesses, reflecting a positive shift in the economic landscape.
The global platform has witnessed significant changes over the past few years, prompting many to reassess their residency choices. Notably, Portugal recently withdrew its Golden Visa Programme after a surge in home prices there, and the government is now focusing on addressing real estate speculation. Interestingly in July 2023 we published an article “ Does a Favourable Exchange Rate Tempt Foreign Buyers?” Perhaps this is starting to take effect, as sales data is showing that “returning expats are really buying into the sub-luxury sector between R5 million and R10 million, realising just how much house they can buy for their money, for example, in Johannesburg.”
The Accenture Life Trends Report for 2024, which focusses on people and their behaviors and attitudes to the world around them—be it business, technology, or other societal shifts, highlights a shift in personal milestones. Buying a home, getting married, and having children are being re-evaluated. In many countries, house prices are rising significantly faster than the salaries needed to pay a mortgage, placing this life goal out of reach for many and prompting a fresh approach to living arrangements, one of which is multigenerational or communal living.
In the December 2023 issue of The Bright Side newsletter (a newsletter that deliberately focusses on good news on the economic front) Economic Advisor Dr Roelof Botha writes “the slump in the residential property market is likely to end as soon as the Reserve Bank’s hawkish monetary policy stance is reversed.” The upcoming 25 January meeting is expected to maintain the repo rate at 8.25%, with the first cut anticipated in July.
Lightstone's survey at the end of 2023 (the go-to company that all realty companies utilize for information, valuations and market intelligence on properties in South Africa) reveals a positive outlook among property practitioners, with 74% anticipating reaching sales targets for 2024 compared to only 45% in 2023. Again, this is looking more positive for 2024.
This optimistic sentiment aligned with Local Real Estate's performance in 2023; finishing with a year on year 18% growth in home sales and a remarkable 60% year-on-year growth in the rentals division. In our offices we saw an uptick in market sentiment with many more serious buyers towards the end of 2023. October was the best month in sales since June 2021 and we also sold record priced properties in both Simbithi Eco Estate and Palm Lakes Estate. This bullish trend led to Local Real Estate making exceptional sales during December.
Embracing the positive momentum, we at Local Real Estate eagerly anticipate another year of growth in our real estate market.
This article has been compiled for general interest and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your property practitioner for specific and detailed advice. Errors and omissions excepted (E&OE)