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Reverse immigration’s effect on property owners

You might assume emigration far exceeds immigration, but many ex-pats are returning home to take advantage of favourable exchange rates and superior lifestyle.

Reverse immigration property market

Article summary

  • More ex-pats are looking to take advantage of the spending power granted by foreign currency.
  • Many also seek a more healthy lifestyle and more spacious locations for raising a family.
  • Property investors should be looking at family-friendly properties (particularly estates) in scenic areas.

You might assume that emigration would far exceed immigration in South Africa, considering loadshedding, crime, and the tough economy.

But you’d be wrong. Reverse immigration (meaning the return of previous emigrants to South Africa) is on the rise. Here’s what that means for the property market.

Reasons for reverse immigration

If you want to plan investment opportunities catering to this trend, it helps to understand why it’s happening in the first place.

Here are some of the reasons expats are returning to their homeland.

  • Spending power: The high exchange rate grants those with foreign currency supreme spending power. With the global economy still recovering from the effects of the pandemic, it helps to move to a place where your currency gives you a substantial economic advantage.
  • Lifestyle: Former South Africans living in urban hubs such as London find themselves pining for the superior outdoor lifestyle and dynamic weather they took for granted growing up.
    In the wake of the pandemic, many have become accustomed to the work-from-home lifestyle, leading to a demand for properties in serene, scenic areas since they’ll be spending more time at home.
  • Family: Many South Africans who left to enjoy the high life in their 20s now have families and are finding it difficult to raise them amidst the tough economic conditions and urban hubbub of big cities.
    Many still have families mostly situated in South Africa and would prefer to raise their kids in proximity to extended family members.

What does this mean for property investors?

It means opportunities if you factor in the requirements of returning ex-pats.

The common reasons for return dictate what properties you should be looking at:

  • Properties in scenic areas: This makes the Western Cape a desirable investment destination, particularly serene outer suburbs.
  • Family-friendly properties: Since many expats are returning to raise families, it’s a good idea to aim for larger properties in family-friendly areas with schools and hospitals.
    Estates (ie. sectional title properties) are a particularly popular option for returning ex-pats, as they offer security, a sense of community, and outdoor areas where children can play safely.

Immigration + semigration

Semigration is also a growing trend in the South African property market.

The good news is that many of the demands of semigrators are the same as those of returning ex-pats. For example, properties in remote, scenic areas. Coastal areas are a particularly popular destination for families and retirees alike.

So property investors are effectively taking advantage of two markets; returning South Africans, and South Africans looking to semigrate.

It’s not just the wealthy purchasing homes in scenic coastal areas. Many younger home buyers are taking advantage of the buyer’s market that prevailed in South Africa. According to Lightstone’s property data, the 24 to 40 age group is the dominant demographic.

Property investment looks positive in 2024

Further adding to the appeal for returning ex-pats are the predictions for 2024 interest rates. Although the past few years have seen a systematic increase in interest rates, experts believe this trend will begin to reverse in 2024.

So homebuyers can look forward to lower interest rates. This combined with the buyer’s market, the favourable (for foreign currency) exchange rate, and the scenic South African lifestyle, suggests that the trend toward reverse emigration will only become more prominent in 2024.

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