The increasing rate of divorce is a leading reason why properties are put on the market, real estate agents have disclosed.
These relationship breakdowns mean brick-and-mortar assets need to be divided or sold or simply, that divorcees, and newly single parents, no longer need extra space.
Increasing numbers of South Africans are also selling to emigrate or downscale, the latest FNB Estate Agents Survey has revealed.
Sellers are downscaling with age and due to financial pressure. During the first three months of this year (Q1), estate agents perceived “downscaling because of life stage” still to be the most prominent reason for selling property.
FNB economist Siphamandla Mkhwanazi says this reason accounted for 23% of all sales.
The figure is similar to that seen in the final quarter of 2018 (Q4), states the latest FNB Estate Agents Survey.
Emigration-driven property sales are “gradually increasing”, accounting for 14.2% of sales in Q1 2019 from 10% in Q4 2018.
“Such sales, according to estate agents,have doubled in the past two years and are, as expected, more prominent in the coastal areas
and upmarket segments.”
While this might not be positive news, Mkhwanazi says “downscaling due to financial pressure”, which has become “increasingly prominent” over the past year, decreased from 19% to 15.9%.
The FNB survey reveals reasons for selling:
- Downscaling due to financial pressure 15.9%.
- Downscaling with life stage 23%.
- Emigrating 14.2%.
- Relocating within South Africa 7.8%.
- Upgrading 9.1%.
- Moving for safety and security reasons 10.2%.
- Change in family structure 12.2%.
- Moving to be closer to work or amenities 7.5%.
While agents from Knight Frank Residential are seeing owners sell for several reasons, chief executive Richard Hardie says selling due to divorce and downscaling is common.
Selling for reasons relating to death and
divorce feature highly on the list of reasons for selling in the Winelands, says Chris Cilliers, chief executive and principal of Lew Geffen Sotheby’s in the area.
There is also a “notable number” of sales due to downscaling.
“There has also been an increase in sales due
to emigration, especially with younger families from areas such as Somerset West.” Cilliers says the branch is receiving more
enquiries from Cape Town buyers “fed up” with growing congestion in the city and Gauteng buyers looking for estate homes.
In Durbanville, 17% of registered property sales in last year were as a result of semigration, says Dawie du Plessis, director and principal of Lew Geffen Sotheby’s International Realty there.
Other reasons the branch recorded include:
- Emigration 17%.
- Financial Problems 14%.
- Upscaling 26%.
- Downscaling 14%.
- Disinvesting 11%.
Property sales due to semigration have recently decreased in the Noordhoek area, says
Mike Greeff, chief executive of Greeff Christie’s International Real Estate.
A number of sales due
to emigration, financial pressure, and divorce has occurred. “Bergvliet, Meadowridge, Kreupelbosch, Oakridge and Diep River have seen emigrations and older sellers moving to retirement villages.
There have been owners or spouses passing
away, which has promoted the decision to sell.” In Bishopscourt Village, Claremont Upper and Kenilworth Upper, many sellers are downscaling, semigrating or emigrating.
Family matters are a deciding factor
NURSERY NEEDED The arrival of children prompts many couples to upscale to larger homes.
Picture: Andre Adjahoe
Selling of homes due to changes
in family structure accounted for 12.2% of all property sales completed in the first three months of this year. These changes include marriage, divorce, new additions and death.
According to a recently released report from Statistics SA, 2017
divorce data indicates a slight increase in the number of divorces from 2016 to 2017.
The number of divorces from 2008 to 2011 fluctuates, but then increases consistently from 2012 to 2017. The highest number was observed in 2009 (
30763) and the lowest in 2011 (20980).
In 2017, more than 25000 divorces were granted, and of this number, 55.6% involved minor children. On the other hand, Stats SA data shows more than 135000 marriages of South Africans and permanent residents were registered at the Department of Home Affairs in 2017.
This figure indicates the continuing declining trend of marriage. From 2008 to 2017, this number has consistently decreased, save for
a 0.6% increase between 2015 and 2016.
Generally, the warmer months from September to December are the most popular for solemnising marriages in South Africa and most newly-weds look to purchase their first homes together in the months following these.
However, in modern relationships, many couples buy properties before getting married, or forego big weddings in favour of getting a foot on the property ladder. Many couples look to sell their homes and upgrade to bigger homes when planning for, or expecting babies, agents say.
While Stats SA revealed that the total number of registered births had been “continuously dropping” from 2013 up until 2016, it increased in 2017. “A total of 989318 live births were registered at the Department of Home Affairs in 2017. “This is an increase of 2.1% compared to 969415 births that were registered in 2016.”
Stats reveal why they sell
GOLDEN YEARS Downscaling for retirement is a leading reason for sales. Picture: Elien Dumon
South African homeowners are selling their homes for a variety of reasons and these differ according to their financial
standing. The four biggest reasons for selling, according to the FNB Estate Agents Survey, are downscaling with age, downscaling due to financial pressure, emigration and change in family structure, but proportions fluctuate between seller income levels.
The data shows the following deviations:
High Net Worth/Upper/Middle/Lower
◆Downscaling due to financial pressure: 13.3%/11.8%/16.5%/19%.
◆Downscaling with life stage: 27.2%/25.7%/21.8%/20.2%.
◆Emigrating: 18.1%/15.5%/14.7%/10.6%.
◆Relocating within SA: 7.7%/8.9%/8.3%/6.9%.
◆Upgrading: 5.4%/10.3%/9.2%/10.9%.
◆Moving for safety and security reasons: 8.7%/10.8%/9.6%/11.5%.
◆Change in family structure: 13.6%/10.4%/12.8%/11.7.
◆Moving to be closer to work or
amenities: 6.1%/6.8%/7.2%/9.2%.
Some sell to rent, others buy smaller
SHARED COSTS A rising trend of communal living property purchases has been noted. Picture: Alexis Brown
Of sellers who put their homes on the market due to financial pressure, about half opt to rent and the rest for a cheaper property, says FNB’s Siphamandla Mkhwanazi.
The proportion of those who opt for
rentals has been rising over the past year, but dropped to 49.01% in Q1 2019 from 68.01% in Q4 2018.
“However, these trends do not appear to have benefited the rental market as vacancies are reported to be increasing and rental inflation continues to languish below inflation. One explanation could be that households are consolidating in the rental market, opting for shared space.
“Related to this, although not a dominant trend yet, there is a rising trend of communal living property purchases, or people buying jointly with friends or family members.
Moving is not child's play
RELATED The needs of children and family are often factors in the decision to sell and
relocate. Picture: Allen Taylor
Children and family needs are huge
considerations for homeowners when they sell and decide where they want to move. As a result of the high number of divorcerelated sales in families with young children, more dual living is happening, says Lew Geffen Sotheby’s International Realty’s Jill Lloyd.
“I am not sure if it is to help the parents or the children.” Secure estates are growing in popularity as they provide “a safe lifestyle for children in a communal environment”, says Knight Frank’s Richard Hardie.
Most sellers who upscale are younger families looking for more space as their families grow, says Lew Geffen Sotheby’s International Realty Dawie du Plessis. “A key factor is people moving closer to the school catchment areas. Properties sold in this category are mostly smaller
townhouses,” he says.
Downscaling boosts eager markets
GOING SMALLER Many homeowners are selling to downscale for retirement or cut back on
home costs and maintenance. Picture: Blake Wheeler
Many homeowners in Rondebosch and Claremont are “feeling the squeeze badly” and selling for financial reasons, says Jill Lloyd of Lew Geffen
Sotheby’s International Realty.
“The increase in council rates has made people rethink their housing requirements, especially big gardens and houses that need staff to tend them. Staffing is expensive, as are water and electricity
over and above the rocketing property rates.”
While Knight Frank’s Richard Hardie says clients
with financial issues tend to get to the point of liquidation and often keep their future plans confidential, many move into rented accommodation.
Downscalers, however, look to buy lock-upand-go properties like apartments or townhouses.
In the Noordhoek area, “plenty of people are looking to downscale”, says Greeff Christie’s International Real Estate’s Mike Greeff. They are selling
in other areas and downscaling to Noordhoek as it is further from the city and therefore less expensive.
“People are looking to free up cash and go as small as possible by maybe owning a lock-up-and-go here and a home in the countryside or just have a single lock-up-and-go unit.”
Areas such as Bishopscourt Village, Claremont
Upper and Kenilworth Upper are seeing many sellers downscaling once adult children have left the home or due to financial reasons, Greeff says.
“In the Constantia Upper area, the most common trend is the need for simplicity. Many want to
sell their large properties in favour of smaller ones that are more easily maintained. Gated communities or security estates are the most obvious choice.”
There is also a “definite” trend of downscaling in Rondebosch and Claremont in order to move into retirement homes and villages, says Lloyd. Emigration, too, is an “increasingly relevant factor”.
She says while there are some highly qualified people leaving the country, there are also diehards taking advantage of the available stock. Similarly, many buyers are taking advantage of the better property prices to upscale.
In the Kenilworth and Harfield areas, a significant number of recent sales has been due to retirement, with retirees downscaling to smaller free-standing homes, say Marc Plastow and Mitchell McKenzie, area specialists for Lew Geffen Sotheby’s International Realty.
In Durbanville, people are selling larger homes and empty-nesters and retirees are moving to smaller homes, says the agency’s Dawie du Plessis. He says: “There is a growing number of sellers, often owners of multiple properties, who are liquidating assets and not reinvesting in property.”