South Africans kissing Gauteng goodbye

Recent data shows that there has been a massive year-on-year increase in South African homeowners selling and moving to the Western Cape, and most of these have been from Gauteng.

This was highlighted in Absa’s latest Homeowner Sentiment Index, a barometer of consumer confidence across six key metrics in the country’s housing market.

The report highlighted that South African consumers are confident in the future of residential property, with sentiment climbing to 87% in the final quarter of 2024.

Additionally, 77% of respondents said they were confident in buying rather than renting, up 4% from the previous quarter, driven by the belief that it is more beneficial to own a home than rent one.

“These levels recorded are the highest in a decade with the dominance of first-time buyers in the market relative to other segments and an ongoing trend,” the report said.

Focusing on repeat buyers, the report flagged that there is still notable movement in homeowners selling and buying in another province, with the semigration trend still in full swing.

“Homeowners who sell their current property and buy in another province continue to choose Western Cape,” it said.

However, the report added that this subgroup of repeat buyers moving to the Western Cape is predominantly from Gauteng.

Absa noted that the Western Cape’s net inward migration of homeowners increased year-on-year by 22.5% for the full year 2024.

Lightone’s data echoes this trend. Its 2024 property report shows that 1 in 4 homeowners selling and buying a new home move to another province.

“Gauteng and Western Cape dominate this trend, comprising 48% and 23% of the market, respectively,” it said.

Despite Gauteng participation in attracting some homeowners from other provinces, Lightstone’s data shows that this is tapering off.

“While Gauteng continues to attract repeat buyers, its retention rate has declined by 10% in recent years, whereas the Western Cape has seen a far more modest drop from 89% to 87%,” it said.

Two-way street

However, while some homeowners are moving away from Gauteng, others are leaving the Western Cape for different reasons.

Property experts have noted that those moving to the Western Cape are those looking for a better quality of life and services. These homeowners are high-income earners and affluent retirees.

Samuel Seeff, chairman of the Seeff Property Group, said that the Western Cape draws wealthier semigrants who are often prepared to invest substantial sums in high-end properties, particularly along Cape Town’s Atlantic Seaboard.

He noted a massive demand for homes priced between R5 million and R20 million, especially among buyers seeking a combination of lifestyle, security, and prestige.

Cape Town, often seen as the jewel of the Western Cape, has been a focal point for semigration. However, affordability challenges are causing some residents to leave the city.

Gauteng, by contrast, continues to appeal to those seeking economic opportunities and value for money.

Johannesburg, in particular, is South Africa’s most affordable major metro, with an average property transaction price of R1.2 million—below the national average of R1.3 million.

According to property group Fine & Country, one of the main reasons behind the move away from the Western Cape is the reversal of the return-to-office culture. 

“While remote work surged during the pandemic, many companies are now moving towards hybrid or in-office work models,” it said.

According to a survey by CareerJunction, nearly 60% of South African employers are adopting these changes, and many of the country’s largest firms are headquartered in Johannesburg. 

Additionally, the property group added that professionals realise that career progression and high-level networking are still centred in the city. 

“For many professionals, being close to head offices and leadership teams is essential for career growth. Johannesburg continues to be the hub for corporate decision-making,” explained John Herbst, CEO of Fine & Country Sub-Saharan Africa.

Johannesburg’s status as South Africa’s economic powerhouse is another significant factor influencing the reverse semigration trend, with many searching for better opportunities.  

This priority of affordability and job opportunity is particularly evident for young first-time buyers in the market.

Data from Ooba Home Loans showed that applications from this group increased from 45.2% to 46.9% by December 2024, driven by lower interest rates. It added that Gauteng South & East saw the highest demand in this respect.

However, despite this positive move towards Gauteng, the province’s declining service delivery is a major roadblock to this trend continuing.

Poor governance, incompetence, and unchecked corruption have drained public resources, leaving the city unable to maintain its most basic infrastructure.

The city’s roads are deteriorating, power outages are frequent, and water shortages are becoming commonplace.

South African President Cyril Ramaphosa even warned officials in Johannesburg to resolve a myriad of problems dogging the city ahead of a summit of leaders from the Group of 20 nations in November.

These issues are also a major problem for homeowners, who will continue to sell up and leave if the province continues to deteriorate, as outlined by Absa’s data.