Just as they’ve left the nest, many young South Africans are moving back home again as the economy shrinks – taking with it their plans for the future.
Research released by online classifieds community Gumtree on Tuesday indicates that 64% of young South Africans between the ages of 21 and 35 may have had to move home due to the economic effects of Covid-19.
Finance minister Tito Mboweni said in an opinion piece published on Sunday that the economy would likely contract by more than 7% this year, citing the lockdown due to the pandemic which saw domestic produce shrink by 51%.
The latest report by the National Income Dynamics Study – Coronavirus Rapid Mobile Survey in July, found an 18% decline in employment between February and April 2020.
That equates to about 3 million jobs lost – many of those being young people, who now make up a youth unemployment rate of 59% recorded by Stats SA.
Gumtree’s research was based on the Pew Research Centre in the US, which recently announced the findings of its US survey into urban dwelling.
According to this research, for the first time ever most 18- to 34-year-olds were living at home with their parents. In July, 52% of millennials were living with their parents – up from 47% in February 2020.
Brand marketing manager at Gumtree SA Estelle Nagel said they did similar research on social media.
“We asked our Twitter followers – particularly those between the ages of 21 and 35 – if they or someone they knew had been forced to move home,” she said.
“The results were a resounding yes, with 64% of young South Africans in our target group of 2,400 responding that they had been directly impacted by the economic knock-on effects of Covid-19.
“This is also congruent with the uptick in rental property listings that we are seeing on the Gumtree platform.”
Gumtree has 41,723 rental houses and flats listed – including 17,140 in Gauteng, 12,795 in the Western Cape, and 7,657 in KwaZulu-Natal.
Meanwhile, a report on September 10 by the Tenant Profile Network (TPN), a credit bureau which tracks tenant behaviour in SA, found that 11.39% of rental properties were vacant.
According to the report, this is explained by job losses and an increasing supply of rental space relative to demand.
TPN found that the market for tenants paying less than R3,000pm had the highest rental inflation, at 2.41% year-on-year. The rental inflation for those paying R12,000 or more a month was the lowest, at -0.83%
“The relative out performance of the lowest segment appears unlikely to last as this segment has some of the most severe tenant financial pressure, along with a high estimated vacancy rate,” said the report.
But Nagel still has hope for young entrepreneurs.
“We are a resilient nation and although the unemployment rate has soared … we have also seen an uptick in entrepreneurial activity and listings on our platform,” she said.
“We currently have 62,892 services listed on Gumtree [in] 28 different category offerings, from ‘building and trades’ [14,380 adverts] to tutors and education [2,185].
“This could mean that although young South Africans have borne the brunt of Covid-19 economic effect, they’re ready to start something new, taking to heart the National Planning Commission’s view that small businesses are the backbone of economic recovery and stimulation for the post-Covid-19 era.
“These brave entrepreneurs would be in good company. The likes of Google, Apple, Microsoft and Amazon – all multibillion-dollar companies – all started out in their founders’ parents’ garages.”
BY Alex Patrick