Gauteng Business News

Send  Share  RSS  Twitter  05 Oct 2010

PROPERTY: It’s ‘Back to the City’ Now for Many Semigrants


Recent Gauteng Business News

The wave of property purchasing that saw prices soar in country towns and villages during the property boom has ebbed and is leaving many of them 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,” says Realty 1 International Property Group CEO Hano Jacobs, “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.

“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”.

Says Jacobs: “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 2670 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, its 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.”

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