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Back to city for many semigrants

15 Sep 2010

Many country towns and villages are left high and dry as lots of new residents start to “follow the money” back to the cities.

 

 

 

“This is very clearly reflected in our current sales patterns, which reveal strong and growing demand in the metro areas, and slow or declining demand in many smaller centres, where prices are now often too high for local buyers and there are insufficient economic opportunities to attract city buyers with more money,” says Realty 1 International Property Group CEO Hano Jacobs.

“In fact, what we are seeing in more and more platteland towns now is a distinct reversal of the relocation trend of a few years ago, as many of the people who came from cities and bigger towns a few years ago in search of a better lifestyle in the country pack up and head back to the cities in search of better business or job prospects.”

These findings underline the conclusion drawn by First National Bank property analyst John Loos after a recent study of “semigration” patterns in SA over the past 10 years, which is that “economic opportunity remains the number one driver of relocation – contrary to the perception that most semigration has taken place due to people fleeing crime and grime”.

“During the boom years, many country towns were able to offer a heady combination of a better lifestyle as well as economic opportunity – which is obviously first prize if you can get it – but in recent times their little economies have been hard-hit not only by the recession but by a massive decline in the number of farmers and thus in the agribusiness on which they are founded.

“According to estimates by Grain SA, the number of farmers has virtually halved from 60,000 to 35,000 in the past 10 years, while the Milk Producers’ Organisation noted recently that the number of dairy farmers has fallen to 2,670 from more than 30,000 in the 1980s. There are many reasons for this, but the implications are obvious for people trying to run businesses in towns and villages that are mostly dependent on supplying goods and services to a local farming community.

“No matter how lovely the lifestyle, you can’t sustain it without any earnings, and unless the town offers other opportunities for entrepreneurship, like tourism or mining or infrastructure development, business owners, old as well as new, will simply up and go to other towns or back to the cities where there are better prospects.

“This is what is happening in many places on the platteland right now, and it is not just their real estate markets that are being negatively affected. Employment prospects obviously also decline when businesses leave town, leading to a downward spiral of poverty. This is another important reason, besides food security, for the country’s farming sector to be nurtured by government and for new farmers, black and white, to be encouraged and properly supported.”

Andy Collett, Pam Golding Properties’ (PGP) regional manager: East Cape, Garden Route, Karoo & Kalahari, says Johannesburg dwellers cite crime as a first reason for wanting to leave Gauteng and they normally look for high security properties. “The lifestyle factor is also a deciding element. Many leisure activities, events and the spectacular natural beauty of this area makes it very appealing to big city dwellers, particularly from Gauteng.”

He says Grahamstown, home to Rhodes University and other nationally-respected educational facilities, is popular among those relocating from Gauteng. “This market has remained sustainable because it is largely driven by a demand from those seeking the best educational facilities for their children, in a safe environment.

“Schooling in Grahamstown is of a very high standard with excellent private schools such as St Andrews College and Preparatory school, Diocesan School for Girls and Kingswood College, as well as very good government schools Victoria Girls High and Primary schools, Graeme College and PJ Olivier Hoërskool.

“Another popular area among those from Gauteng is George, with its international airport, making it ideal for those commuting on business.

“Then there is Sedgefield, which is arguably known as the retirement town of South Africa. Four out of every five buyers move here (from other areas including Gauteng) to retire. Many of the empty properties in town belong to the somewhat younger owners (between 40 and 50) who use the properties only for holidays. However, the flow of upcountry buyers has been reduced with the result that prices are certainly declining, in particular for vacant erven.

“Lifestyle and security are two important points in buyers deciding on Sedgefield as a desirable location,” he says.

Laurie Wener, MD of PGP in the Western Cape, says people are “not specifically” moving back to the bigger metros after fleeing to the rural areas. “People are moving around to take up employment, but not specifically in the city. However, city living is increasing in popularity for the sake of convenience, secure living, the vibe etc. It appeals mainly to young business people and professionals (singles and couples) and part-time residents. There is a huge demand for rented accommodation.”

She says in terms of semigration sales in Cape Town, apartments for singles and couples and houses near schools for families are selling. “They often rent before they buy in order to decide on a suburb of choice.” – Eugene Brink

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