How Big Is The Second Home Market?
 

How Big Is The Second Home Market?

FNB estimated that 16.2% of properties bought by individual South Africans are second homes. The data gathered by FNB was contained in the group’s April 2016 Property Barometer report which focused on the buy to let property market. FNB said that the buy to let home buying market is stable which isn’t necessarily a bad thing in the current economic circumstance. So how big is the second home market?

John Loose, the property and household sector strategist at FNB said the picture continues to be one of moderate buy to let activity levels although at the same time limited selling of rental or investment properties. The FNB’s Estate Agent Survey showed that buy to let purchases in the 1st quarter 2016 were unchanged from the previous at 9% of total purchases. The 9% estimate has been recorded in 6 of the past 7 quarters which is an indication of stability. These recent esvaalsecondhome345timates of buy to let levels remain moderate by comparison to last decades boom period whereby they were estimated as high as around 25% of total home buying at a stage back in 2004.

The big attraction of buy to let buying is the expected capital growth that can be achieved, but the price growth generally remains benign at the moment. For people focused on a rental income stream, there has been some yield compression since 2014 too which has reduced the buy to let attractiveness slightly in recent years.

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How Big Is The Second Home Market?
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How Big Is The Second Home Market?
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FNB estimated that 16.2% of properties bought by individual South Africans are second homes. The data gathered by FNB was contained in the group's April 2016 Property Barometer report which focused on the buy to let property market.
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