According to the latest findings from FNB's Property Barometer, the landscape of South Africa's property market is experiencing a notable shift, with the once booming semigration trend to coastal towns showing signs of deceleration.
Conversely, a new trend is emerging as returning expatriates inject fresh energy into the luxury property sector.
FNB's analysis indicates a significant decline in buying activity within the affluent market throughout 2023, resulting in a downward pressure on property values.
This downturn follows a period of prosperity during 2021 and 2022, characterised by favorable pricing dynamics, a resilient rebound in non-labor income, strengthened balance sheets post the Covid-19 pandemic, and the increasing prevalence of remote work arrangements.
The normalisation of the semigration phenomenon is cited as a primary factor contributing to the waning demand for high-end properties in coastal areas. However, amidst this transition, there is a noteworthy uptick in reverse emigration, where South African expatriates are returning home.
Although the scale of this repatriation remains modest, anecdotal evidence suggests that these returning expats are actively engaging in purchasing local properties, particularly in the higher-priced segments.
FNB economists said that while sentiment remains a crucial driver of market dynamics, external factors such as the February Budget and National Election outcomes present additional event risks.
"We expect volumes to move relatively sideways this year and a price growth trajectory with a mild negative bias,” FNB said.
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