Lifestyle

The 5 best-run municipalities in South Africa – and how much it costs to live in them

Malcolm Libera

 ·24 Jul 2026

Depending on where you choose to buy a home, it will cost you between R11,800 and R25,000 a month to live in the five top-rated municipalities in South Africa in 2026.

The municipalities were identified in Ratings Afrika’s latest Municipal Financial Sustainability Index (MFSI), which includes Drakenstein, Hessequa, Overstrand, Saldanha Bay and Swartland.

The MFSI assessed the financial health of South Africa’s 120 largest local municipalities and eight metropolitan municipalities using audited financial results for the year ended June 2025.

According to Ratings Afrika, financial sustainability is “the financial ability of a municipality to deliver services, and to develop and maintain the infrastructure required by its residents, without unplanned increases in rates and tariffs or reductions in service levels.”

The agency added that financially sustainable municipalities should also be able to withstand “financial shocks arising from natural and economic disasters, political instability, and other adverse events without requiring external financial assistance.”

The index evaluated municipalities across six key areas: operating performance, liquidity management, debt governance, budget practices, affordability and infrastructure development

 A score of 100 represents a municipality with an “undoubted” level of financial sustainability.

While the Western Cape continues to dominate the rankings, the broader national picture remains concerning.

Ratings Afrika said the average financial sustainability score for local municipalities has declined from 36 out of 100 in 2021 to just 33 in 2025. Excluding the Western Cape, the average falls to only 27.

“The average financial sustainability score has fallen to 27 out of 100, and the combined operating deficit has increased to R39 billion,” the agency said. 

It warned that the resulting liquidity shortfall of R128.7 billion highlights a significant deterioration in financial resilience.

According to Ratings Afrika, these trends are evidence of a systemic failure that is increasingly undermining service delivery, infrastructure sustainability and economic growth.

Despite ongoing deterioration in municipal finances across South Africa, Ratings Afrika said several municipalities continue to stand out because of “strong governance, sound financial management and disciplined execution.”

What it costs to live in the top municipalities

The five highest-scoring municipalities in 2025, listed alphabetically, are Drakenstein, Hessequa, Overstrand, Saldanha Bay and Swartland. 

Ratings Afrika noted that these municipalities are characterised by well-established financial policies, long-term financial planning, prudent budgeting, effective expenditure control and strong revenue collection.

It added that these municipalities are better positioned to invest in infrastructure, maintain service delivery standards and absorb financial shocks without compromising their long-term financial health.

Particular recognition is due to Drakenstein, which has achieved the most significant improvement on the Financial Sustainability Index over the past six years.

BusinessTech looked at the average residential property prices from Deeds Office transaction data and market indices, combined with current municipal tariffs, to give you a good idea of what it costs to live in these municipalities.

However, these estimates are based on municipality-wide average home prices. Buyers purchasing properties in premium areas would result in significantly higher bond repayments and much higher overall monthly living costs.

Such areas include Paarl’s luxury estates in Drakenstein, Hermanus in Overstrand, Stilbaai in Hessequa, Langebaan in Saldanha Bay, or exclusive developments in Swartland.

With an average home price of R2.08 million, a homeowner in Drakenstein faces the highest monthly cost among the top-performing municipalities, with an estimated monthly cost for a typical household of R24,890.80.

This includes an estimated home loan repayment of R20,766, property rates of R1,079.50, electricity costs of R2,010, water charges of R410, sanitation fees of R365 and refuse removal of R260.

Overstrand follows closely behind. An average home price of R2.05 million works out to an estimated monthly household bill of R24,521.79, including bond repayments and standard municipal charges.

Hessequa, home to towns such as Stilbaai, Riversdale and Heidelberg, has an average property price of R1.675 million.

A typical homeowner would spend around R20,826.86 per month, including a home loan repayment of R16,722.86.

Living costs become considerably lower in Saldanha Bay, where the average residential property costs R1.19 million.

Estimated monthly expenses amount to R15,403.22, with a bond repayment of just under R11,900 making up most of the total.

Swartland is the most affordable of the five top-rated municipalities. Based on an average home price of R855,000, the estimated monthly cost of ownership and municipal services is R11,828.15, including a home loan repayment of R8,536.

Drakenstein

Overstrand

Hessequa

Saldanha Bay

Swartland