Besides the Rugby World cup and all the amazing sport, entertaining and inspiring us, the other interesting news this month was from the release of the Census 2022 data.
For the most part South Africa seems to be on the same trajectory it has been for the last 25 years.
With population growth of more than 50% from 1996 to 2022 with annual growth just under 2% per year in the last 10 years. Showing that population growth is likely slowing.
With the White and Coloured population declining as a percentage of the total population and with these two groups (along with the Indian / Asian group) being the most well educated, this shows the significant impact of the brain drain via immigration over the last 11 years.
With one (1) in six (6) sellers selling to semigrate or emigrate this is a real long term driver of supply in the residential market in certain areas.
Our very young population's average age is 27 years with 69% living in urban locations.
This linked to a declining GDP per capita and the lacklustre economic growth since 2011 has led to the massive unemployment of our youth of close to 60%.
Rural areas remain the home of the most uneducated group of the population.
With Gauteng and the Western Cape having the most educated population.
From a property perspective, the good news is that 88% of the population have access to formal housing.
Sadly less than 60% have access to running water inside their dwellings. In some areas there are also serious challenges emerging with regard to providing clean running water to their citizens.
The water shedding threat is a clear trend to keep an eye on, though a much more localized problem than electricity loadshedding.
South Africa seems to remain on a strong trend of semigration toward urban centres with the best governance.
To try to access economic opportunities or to escape the dysfunction and collapse of most of the South African provinces a wealth and skills transfer to the Western Cape is a persistent and clear trend.
Another major trend was the increase in immigration from neighboring countries, especially those with little economic opportunities (Zimbabwe, Mozambique & Lesotho). However, the number of 2.4 million total immigrants hardly seems to be anywhere close to the actual number of foreign nationals clearly visible in our urban centres.
The last trend is one we are all acutely aware of. That is the increase of homelessness with the surprising statistic that over 70% of homelessness is the result of economic or domestic challenges (41% no income, 7.9% cannot afford accommodation, 17% family disputes, 8.8% parents died). Only 25% of the homeless cited alcohol or drug abuse as the reason that they were on the streets.
These insights and trends help us to project how the property market will be impacted both nationally and locally. Population growth, income growth and beating the average by identifying where wealth is concentrated, should remain key drivers of our property investment decisions.
Yours in property.
Jacques Grove
Principal and Dreamer
