Recent data reveals a significant shift in South Africa’s property market, with homeowners increasingly leaving Gauteng for the Western Cape. This trend, known as semigration, has gained momentum in recent years, driven by a combination of lifestyle preferences, economic opportunities, and service delivery challenges. Let’s dive into the numbers and uncover the reasons behind this mass migration.
The Numbers Don’t Lie
According to Absa’s latest Homeowner Sentiment Index, consumer confidence in South Africa’s residential property market has reached a decade-high of 87% in the final quarter of 2024. A staggering 77% of respondents expressed a preference for buying over renting, reflecting a growing belief in the long-term benefits of homeownership.
However, the most striking revelation is the surge in homeowners selling their properties in Gauteng and relocating to the Western Cape. Absa’s report highlights a 22.5% year-on-year increase in net inward migration to the Western Cape in 2024, with Gauteng residents leading the charge.
Lightstone’s 2024 property report corroborates this trend, showing that 1 in 4 homeowners selling their properties are moving to another province. Gauteng and the Western Cape dominate this movement, accounting for 48% and 23% of the market, respectively.
Why the Western Cape?
The Western Cape, particularly Cape Town, has become a magnet for high-income earners and affluent retirees seeking a better quality of life. Samuel Seeff, chairman of the Seeff Property Group, notes that semigrants are often willing to invest heavily in high-end properties, especially along Cape Town’s Atlantic Seaboard.
“There’s a massive demand for homes priced between R5 million and R20 million,” says Seeff. “Buyers are drawn to the combination of lifestyle, security, and prestige that the Western Cape offers.”
Cape Town’s reputation as a vibrant, well-managed city with stunning natural beauty has solidified its appeal. However, affordability challenges are beginning to push some residents out, creating a two-way migration trend.
Gauteng’s Appeal: Affordability and Economic Opportunities
While the Western Cape attracts those seeking lifestyle upgrades, Gauteng remains a hub for economic opportunities and affordability. Johannesburg, South Africa’s most affordable major metro, boasts an average property transaction price of R1.2 million—below the national average of R1.3 million.
Fine & Country, a leading property group, attributes part of the reverse migration to Gauteng to the resurgence of in-office work models. “With companies moving towards hybrid or fully in-office work structures, professionals are prioritizing proximity to corporate headquarters and networking opportunities,” explains John Herbst, CEO of Fine & Country Sub-Saharan Africa.
Data from Ooba Home Loans supports this, showing a rise in first-time buyer applications in Gauteng South & East, driven by lower interest rates and job opportunities.
The Challenges Facing Gauteng
Despite its economic appeal, Gauteng’s declining service delivery is a significant deterrent. Poor governance, crumbling infrastructure, frequent power outages, and water shortages have left many homeowners frustrated.
President Cyril Ramaphosa recently warned Johannesburg officials to address these issues ahead of the G20 summit in November 2024. If left unresolved, these challenges could exacerbate the exodus, as highlighted by Absa’s data.
A Two-Way Street
The semigration trend is not one-sided. While many are leaving Gauteng for the Western Cape, others are moving in the opposite direction, driven by career opportunities and affordability. This dynamic underscores the complex interplay of factors shaping South Africa’s property market.
What Does the Future Hold?
As the semigration trend continues, the Western Cape’s appeal as a lifestyle destination and Gauteng’s role as an economic powerhouse will remain key drivers. However, addressing service delivery issues in Gauteng will be crucial to retaining homeowners and reversing the outflow.
For now, the data paints a clear picture: South Africans are voting with their feet, and the Western Cape is emerging as the winner.
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