Owner-Occupiers and ‘Semigration’ can protect Developers

PROPERTY DEVELOPERS HAVE SPECIFIC BUYER SEGMENTS THAT THEY TARGET WHEN LOOKING TO SELL: THE LOCAL OR FOREIGN INVESTORS AND THE OWNER-OCCUPIERS 

Most of the time these buyers are targeted equally. But as the South African economy looks increasingly uncertain some developers are looking more to the owner-occupier segment to offer more long-term security than that of the investor market.

Investing can take a back seat in a tough economy. Owner-occupiers who are buying to live, will always be looking to spend on a home as a primary need.

Says Jacques van Embden, MD of Blok urban property developers: “We sell all our property off plan, so there is the obvious attraction to the market of avoiding transfer duties. But we have always focused on owner-occupiers for reasons including occupancy and the associated benefits that it brings to a building and its residents. We’re realising that this business model seems to be protecting us from the downturn some of the property market is seeing.”

This is not to say that the investor market has completely shut down. According to Van Embden the trend of “semigration” has picked up significantly, with many people from around South Africa choosing to relocate to Cape Town but still commute elsewhere for work. People are also still buying to let, and prime areas such as Cape Town and Sandton offer relatively low risk considering how strong rental markets remain.

 

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