Millionaires calling it quits in South Africa’s richest city
City of Johannesburg’s worsening financial position is posing a major risk to property sentiment and values in the city, which is already seeing an outflow of millionaires due to governance concerns.
Last week, Finance Minister Enoch Godongwana noted that the city is technically bankrupt, with the minister threatening to withdraw billions of rands in funding if it does not scrap an unaffordable wage bill.
Godongwana revealed that the City of Johannesburg currently owes creditors R25.2 billion, while only having R3.9 billion in cash in the bank.
“This is a market of severe financial distress, indicating that the city does not have the liquidity required to pay its creditors,” Godongwana said in a letter to Mayor Dada Morero.
Godongwana has since met with the Executive Mayor, Dada Morero, to discuss the serious concerns raised by the National Treasury.
“The meeting on Friday, 8 May, between Minister Godongwana and Mayor Morero, and their respective teams of officials and technical experts, was robust and productive.”
“The engagements are ongoing and are being treated with the urgency that they merit,” the Treasury said.
Speaking in an interview with The Money Show, Berry Everitt, CEO of Chas Everitt International Property Group, said the danger of the National Treasury’s warning to the city is a loss of confidence in the property market,” said Everitt.
“Property markets are so sensitive to perceptions of stability, competent governance, and reliable service delivery.”
He said the concerns around Johannesburg’s finances come at a particularly sensitive time for the city, which had recently started showing signs of recovery after years of stagnant property growth.
Everitt noted that Johannesburg property prices had underperformed for roughly a decade, while the Western Cape experienced significantly stronger growth driven by semigration trends.
“There’s been a huge difference in property growth in the Western Cape and Johannesburg over the last couple of years, which is largely due to semigration,” he said.
“And the most important reasons behind that semigration are the perception of the good governance of Cape Town versus poor governance in Joburg.”
Millionaires are leaving
A major indication of this perception on governance was noted in Henley and Partners’ latest African Wealth Report, which showed that High-Net-Worth-Individuals (HNWIs) are leaving Johannesburg.
According to the report, over the past 10 years, while Johannesburg has lost 35% of its millionaires, the Cape Winelands region has seen a 42% increase in HNWIs.
Cape Town has experienced a 33% increase in HNWIs, and the Garden Route region has seen a 30% increase. Despite this, Johannesburg still remains the city with the highest number of HNWIs in South Africa as of 2025.
However, while Johannesburg leads, Cape Town is rapidly closing the gap and is projected to potentially overtake it by 2030 due to continued wealth migration and lifestyle preferences.
According to Everitt, Johannesburg had only recently begun regaining momentum, with more people returning from the Cape and overseas in search of work and business opportunities.
“In the past year, Johannesburg has been on the rise again, and we’ve been really excited about that,” he said.
However, he warned that uncertainty around the city’s financial future could quickly reverse those gains.
“We’re concerned that investors and homeowners start to feel uncertain again about Johannesburg’s financial future,” said Everitt.
“They may delay buying decisions, postpone developments, or redirect investment elsewhere.”
He added that the commercial property sector could also come under pressure if businesses lose confidence in the city’s governance and infrastructure.
“Businesses could be more cautious about expanding operations or signing long-term leases if they fear worsening infrastructure problems or instability,” he said.
Despite the concerns, Everitt stressed that Johannesburg still has major structural advantages as South Africa’s economic centre.
“Johannesburg remains South Africa’s economic hub and has enormous underlying strengths. So, this is not a crisis that cannot be managed,” he said.
However, he warned that prolonged uncertainty would continue damaging sentiment and could eventually weigh on property values.
“The longer uncertainty continues, that’s where the emotional writhing happens and the greater the potential impact on property values and investment sentiment,” he said.
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