Interprovincial Migration Trends (The Bugle)

The migration of people between provinces and their property buying behavior is an interesting topic. The question of how one could reliably measure this migration on a macro-economic basis requires thoughtful interrogation. FNB have come up with a very smart proxy as a solution to this. Using reliable deeds office property transfer data they identify all purchases by individuals where there is a corresponding sale by the same individual within 12 months either side of the purchase. Most of these repeat buying transactions are within the same province, but a portion of these (18,7% in 2012) were in a province different to where the corresponding sale took place. It is this sample that is then used as the estimate for people migrating between provinces. Some holiday home purchases could interfere with this data set.  Migration by young professionals who may well be first time home buyers in their new adopted province or families moving to a new province having sold their home, but deciding to rent for a year prior to buying again, will not be measured in this pool of transactions, but it is sufficiently large and reliable to give us a very good idea of overall semi-gration flows. The overall growth in this level of inter-provincial repeat buyer migration in 2012 was 3,1%, down from the 4,8% recorded in 2011 which is in line with the recent economic slowdown and the resulting slowdown in labour mobility. 

What the research reveals is that the exodus of repeat buyers is relatively high in the smaller provinces. The Western Cape still has the lowest outflow of repeat buyers (only 12,9%) followed by Gauteng (16,2%), Eastern Cape (19,5%) and KZN (19,7%). But what about the inflows to each province? It is useful to consider the net in- or outflows to get a full picture of migration trends. When one considers the repeat buyers entering a province minus those departing, it was the Western Cape which has a large net inward migration of 6,7%. Gauteng had a small net outward migration rate of -0,7% of total repeat buying, KZN an outflow of -1,5% and the Eastern Cape a slightly higher outflow of -2,6%. The Western Cape has an apparent competitive advantage in the form of the lowest repeat buyers leaving the province and by far the strongest net inward migration rate from other provinces. The reasons provided are that the province’s economy is the 2^nd largest in South Africa after Gauteng, and Cape Town’s perceived high quality lifestyle compared to other South African cities. With net positive migration into the Western Cape, we can expect the prices of property in those highly desirable suburbs to continue to be bid upwards. Unfortunately we do not have the data for only the North Coast of KZN, but I suspect that our figures would rival those of the Western Cape. The proximity of the King Shaka international airport, the abundance of high quality secure gated estates and the beautiful coastline provide an attractive mix, and a value for money alternative to the Western Cape.

(Author: Andreas Wassenaar, published in The Bugle, 28th Aug 2013)