Accurately measuring the extent of migration between provinces

Accurately measuring the extent of migration between provinces

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Migration between provinces within South Africa is something many of us have firsthand experience with and we understand the basic reasons why people migrate. Typically migration to Gauteng would be for work-related opportunities and migration to the Western Cape or KwaZulu-Natal (KZN) would often be associated with retirement or lifestyle-related motivations. Andreas Wassenaar, Licensee and Principal Seeff Dolphin Coast, says he has often thought about ways to accurately measure this migration, which he discusses below. This is not easy. Enrolments at the schools within our area provide some guide. New registration of homes in the Deeds Office provide a good indication of growth in general residential stock levels – but is hardly an indicator to provide insight into migration trends. However, FNB have come up with a very clever measure using Deeds Office data, which can act as an excellent proxy for migration between provinces around the country. They call this ‘inter-provincial repeat home buying’, and it is measured by identifying purchases made by individuals (‘natural persons’) where there is a corresponding sale by the same individual 6 months before or after that purchase. The bulk of the repeat buying transactions are within the same province, but a portion (12.9% in 2015 according to FNB) are in a province other than where the corresponding sale took place. This provides an estimate for the year's inter-provincial relocation rate or what they call the repeat buyer semi-gration rate. It is not an exact science, as some holiday property buying may be counted, and first-time buyers who have relocated for work reasons are excluded. Nevertheless it is an excellent proxy for the measure of ‘semi-gration’ between our provinces. Overall 2015 showed an increase in the number of inter-provincial repeat buying between the provinces at 12.9%. This is up from 11.1% in 2014, and significantly higher than the lows of 6.4% in 2009 and 2010. What is interesting is that the figures indicate that the Western Cape has developed into a very attractive option for many people. When the outflow of repeat individual buyers is measured, the Western Cape has by far the lowest at 7.3%, followed by Gauteng at 10.6% and KZN in third place at 12.2%. Mpumalanga and the Free State have the highest outflow of repeat buyers, at 31.9% and 31% respectively. If we add up all the outflows and inflows to get a net migration figure, then we really begin to understand the relative attractiveness of the Western Cape, with a positive net inflow of 12.2% of repeat individual buyers. Every other province has a negative net flow, with only the Eastern Cape posting a recent positive 1.8%. Unsurprisingly, the largest negative net outflows are experienced by Mpumalanga (-11.3%) and Free State (-9.9%). KZN has a far smaller negative net outflow of -2%. I am convinced that if we measured only the semi-gration to and from the greater Ballito area, this would exceed even the 12.2% of the Western Cape. Unfortunately we do not have these statistics at hand, but even the Pretoria-based developers of our soon to be completed regional shopping centre would agree. I have often remarked that Pretoria must be empty because it feels like all those folks have moved down to greater Ballito. I am happy about this as it provides additional demand for our stock of residential properties across the entire Dolphin Coast The measurement of the migration by individuals who then purchase their first home in the province they have migrated to is specifically excluded from the data set. This may well skew Gauteng's figures, as many young people would move to Gauteng from the other provinces for work-related opportunities and then end up purchasing a property there. KZN is expected to be influenced by this to a far lesser extent. Contact Andreas Wassenaar, Principal – Seeff Dolphin Coast, on 082 837 9094, email andreasw@seeff.com. See also andreaswassenaar.blogspot.com.

Author: Seeff