FNB has a few facts that could surprise. The market looks a little “older” than expected.
There are various almost “fixed” reasons for property sales. Because the financial situation has not been all that great the trends have changed slightly.
There is an age group in the market almost dominating movement. It should not be viewed as negative but more as a statistic. The stats are not new just what they actually represent in South Africa currently.
FNB's report has it at the 3rd quarter 2013 looking as follows, 9% are moving closer to work, 8% are moving around in South Africa, 17% are upgrading, 12% are moving for security reasons, 12% are moving because of family structure, 16 % are down scaling because of financial burdens, 3% are emigrating and 23% downscaling to adjust for life stage change.
According to John Loos, FNB Strategist, the “older” segment of the market is showing more movement because of life changes, children leaving home and homes become too large to maintain. The oldies are thus a driving a reasonably sized segment in the market.
Cast your mind back to the time when you embarked on your own life, what size was your parents home, reasonably large to accommodate the family. This is quite a substantial market in terms of value then.
John Loos says the 2011 figures were at 21% for the 2nd quarter and has remained above the 20% level which was a sharp increase from the 2nd quarter at 12%.
This downscaling should not be seen entirely as negative as there is stability from this market segment. Generally members in this market segment have savings and can sit out the market if it is not to their benefit to sell right away.
This “age” of the market segment seems to be feeding into existing property cycles which has afforded a certain amount of stability to the market.
It would be interesting to see the next cycle develop.
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