Goodbye Joburg – thousands flee to find better living

Cape Town, Africa’s most expensive city for real estate, plans to make it easier to develop homes as thousands flock to the metropolitan for a better quality of life, putting pressure on its R1.2 trillion rand residential property market. 

Wedged between the iconic Table Mountain and the sea, and in close proximity to picturesque winelands, South Africa’s second-biggest city has long been a favourite base for the wealthy seeking to enjoy warm weather and an outdoor lifestyle.

Luxury properties, including on the affluent Atlantic Seaboard region, are among the most in demand on the continent, with prime apartments selling for an average of $5,600 per square meter.  

Cape Town, led by the Democratic Alliance since 2006, also ranks as the country’s best-run major city. It’s drawn middle-class families fleeing poorly governed South African metros after remote working became popular during the coronavirus pandemic. 

That’s contributing to a shortage of affordable housing and pricing locals out of the property market, where home prices have risen 30% in the five years through March 2024, according to data from Statistics South Africa. 

“The numbers are quite staggering,” Geordin Hill-Lewis, the city’s mayor, said in an interview.

“In the last two years, 100,000 families moved to Cape Town from elsewhere in South Africa,” he said, adding that about 80% of the households are from the province of Gauteng, where South Africa’s beleaguered economic hub of Johannesburg is situated. 

Changes to municipal planning by-laws to fast track property development will take effect in July or August, he said.

Under current administrative processes it takes about two years for officials to approve construction plans, the changes will shave months off this and allow the city to better respond to increased demand for housing, he said.    

“We are seeing a spike in applications, which is good,” the mayor said. “We want to see them move through the system quicker and to deliver more affordable accommodation.”

To be sure, Cape Town is also home to Khayelitsha, one of the largest slums in the world, according to Cities Alliance.

Gang violence is prevalent in poorer areas such as the Cape Flats, where the apartheid government forcibly moved people of color from prime locations, and that is a major contributor to the country’s murder rate.

City officials approved more than 4,000 plans for buildings, including residential, industrial and commercial works, worth 7.5 billion rand in the three months through December, a 61% increase in value from a year earlier, spokesperson Luthando Tyhalibongo said. 

While there have been calls locally for the city to intervene in the housing market with mechanisms such as price controls, Hill-Lewis doesn’t agree.

“That’s a very bad idea and has perverse consequences, where you actually get less investment, and therefore higher prices over time.”

Cape Town will spend R120 billion on infrastructure, including power, water and transport networks, over the next 12 years, the mayor said.

It’s also planning to increase visible policing and other measures to combat crime, he said.