The cost of moving to Cape Town

Data published by FNB, suggests that 56% of people looking to leave Gauteng end up in the Western Cape – but the extra expenses and having to downscale are big factors to consider, according to PropertyFox’s David Gibbons.

“Many Gautengers dream of leaving their busy life in the big smoke and setting up a new slower life in beautiful Cape Town. Unfortunately a lot of these dreams never come true because there is a common belief that the drop in income and property size will be too big,” said Gibbons.

“They see themselves moving from a four-bed home with a pool to a two-bed flat with a fan. But the truth is that if they plan well and do their research right, a shift to the coast can become a reality.”

Gibbons noted that while the the trend towards ‘semigration’ is not new, there are no signs of it slowing down.

“In 2016, Cape Talk reported that 20-30% of all buyer enquiries in the Western Cape stem from Pretoria and Johannesburg residents looking to move,” said Gibbons.

Additionally, a 2017 FNB Repeat Home Buyer Study found the Western Cape’s repeat buyer net inflow makes up a as much as 17.4% of the province’s total repeat buys.

“The same study reported that 56.2% of Gauteng’s ‘semigrants’ opt to relocate to the Mother City. The question of why has been answered extensively – it’s mostly linked to a long-term investment in lifestyle.”

Practical examples

“If you’ve been living in sprawling comfort in the suburbs of Jozi and want to trade for a spot right in the heart of Cape Town, you’ll need to downscale, as the following comparison shows,” said Gibbons using two homes currently listed on PropertyFox.

R2.85 million home in Buccleuch vs R2.8 million home in Vredehoek

Johannesburg (Buccleuch) Cape Town (Vredehoek)
A house A flat
3 bedrooms 2 bedrooms
3 bathrooms 1.5 bedrooms
2 receptions room 2 reception rooms
1 study
4 Garages
2 flatlets
1 555 square metres 80 square metres
R1 300 rates bill R1 600 rates bill
R860 levy

“However, if you’re looking to trade suburban bliss upcountry for suburban bliss in the Mother City, the properties are more evenly matched. Although you’ll get less space in Cape Town, in terms of the key aspects like bedrooms and bathrooms, these two properties are quite evenly matched.”

R4 million home in Greenstone hill vs R3.7 million home in Rondebosch

Johannesburg (Buccleuch) Cape Town (Vredehoek)
A house A house
3 bedrooms 3 bedrooms
2.5 bathrooms 2 bathrooms
3 reception rooms 2 reception rooms
2 garages 1 garage
A study 1 flatlet
Domestic quarters
509 square metres 308 square metres

Tips for semigrating 

Identify the phase of life you’re in

“Initially semigration was very much comprised of mid- to high-income established career people opting to purchase property in Cape Town as a retirement investment. However,Moneyweb notes that the trend has spread to young families, who are primarily driven by the wealth of school prospects in the Cape,” said Gibbons.

A 2016 study by Adzuna shows that Johannesburg salaries (average annual salary: R427, 892) are a staggering 18% higher than Cape Town salaries (average annual salary: R352, 089), with far more jobs advertised at the time the research was conducted.

The link between high demand and property prices

It’s a common myth that a substantial sum of money will buy you a mansion in Joburg and a broom closet in the Mother City – as with most real estate factors, it depends where in Joburg and where in Cape Town. Location, as per usual, is everything.

However, it’s an indisputable fact that the Western Cape’s unrelenting popularity is driving up property prices. With 56% of the bonds that Gauteng residents registered last year being for properties in the Western Cape, prices are being pushed up far beyond inflation.

Appreciate the difference between buying and renting

While Cape Town has high property prices, it has a significant number of low-end rentals. In contrast, Johannesburg property prices are lower, but there’s demand for high-end rentals.

According to Gibbons, a family home in Sandton will cost you R70,000 to R80,000 to rent, while its Sea Point equivalent will be R40,000. However, to buy that Sea Point home would be vastly more expensive than to purchase its Joburg equal.

Read: Bad news for coastal town property prices in SA

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The cost of moving to Cape Town