Why ‘semigrants’ are following the money

South African “semigrants” – those people relocating to different parts of the country, rather than emigrating – are mainly moving for economic reasons, according to a survey undertaken by First National Bank.

Relocation for work, or better business opportunities, sees semigrants drawn to major urban centres like Gauteng and the Western Cape.

John Loos, FNB property strategist, says that deeds data over the decade 2000 to 2009 was used to get a clear picture of the extent and direction of semigration.

South Africa’s first-time buyers do not enter into the picture (and the purchase of holiday properties may also skew the results), but the pattern of repeat individual buyers indicates a clear trend.

The Western Cape wins
The Western Cape emerges as the winner in terms of the best estimated net inward migration rate of +3,2% of the province’s estimated repeat buying.

In other words, it has more repeat buyers entering than leaving, as well as the lowest rate of outward migration by repeat buyers.

Loos feels that this is not only due to lifestyle – many rural regions also provide great lifestyle attractions – but because the province has the second-largest major metro economy in the country (as well as the third-largest provincial economy). Also, the Western Cape’s economy has been estimated to be the fastest-growing in the country.

“One surprise emanating from the study, perhaps, is that Gauteng is a more popular semigration destination for Western Cape outbound buyers, relative to the province’s size, than the Western Cape is for Gauteng buyers relative to Gauteng’s much larger size,” FNB’s study reveals.

This naturally emphasises one of the key findings of the study – that economics dictates semigration.

The Western Cape’s outbound repeat buyers are overwhelmingly headed for Gauteng, while Gauteng’s outbound buyers are more evenly distributed across the country.

Secondary reasons for semigration are: relocation for retirement; a desire to escape traffic and congestion; the need to move closer to children or other family members; a desire to escape high crime levels by moving to perceived safer areas.

Most people, it seems, stay in urban areas or move to urban areas to make money, contrary to the notion that South Africans are moving to flee “crime and grime”.

Gauteng remains the main economic hub
In terms of sheer numbers, therefore, Gauteng remains the main economic hub in the country, reflecting a share of 33,2% of the national economy.

KwaZulu-Natal is second with 16,3% and the Western Cape third with 14,3%. However, the leader in terms of economic growth is clearly the Western Cape, coming out tops in terms of annual growth rate.

Its average annual growth rate of 4,2% during the past decade just pips the Gauteng growth rate of 4,1%.

The picture reveals that small provincial economies may be the losers in terms of retaining their skills base and attracting new skills. They are not popular semigration destinations. And although KZN should be attracting semigrants by virtue of its strong economy and great lifestyle, it is really more heavy-industry driven, so it loses out to the services-driven Western Cape.

In summary, Gauteng has attracted the most estimated semigrant repeat buyers – 38 566 over 10 years – with the Western Cape far behind with 23 408 inward semigrant buyers, and KZN with only 15 474.

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