Joburg vs Cape Town: Best city challenge

A new report pits rival cities – Joburg and Cape Town – against each other as a destination of choice for the world’s wealthiest individuals.

The 2015 Knight Frank Global Wealth Report shows which nations are home to the most ultra high net worth individuals (UHNWI).

It identified Johannesburg (28th) and Cape Town (36th) among the top 40 global cities holding the most value for wealthy people.

And while Johannesburg has become an increasingly popular destination for prime industrial property, with larger areas of the city’s industrial zones being bought up by private Chinese investors, the report found that Cape Town offers the best value for luxury property in the world.

BusinessTech decided to crunch a few economic statistics published by various institutions over the past few years looking specifically at Cape Town and Joburg.

Both cities have also received a fair amount of accolades in recent months, being powerhouses in an African context.

City economy

In January, independent research firm, the Brookings Institute outlined the growth patterns in the world’s 300 largest metro economies on two key economic indicators— annualised growth rate of real GDP per capita, and the annualised growth rate of employment.

It found that Johannesburg metro, with a population of 5,065,100, ranked 173rd versus Cape Town metro at 188th and a population of 4,178,700.

It noted that Joburg had a GDP per capita of $16,370 in 2014, against $14,086 for Cape Town, while the former had 1,880,600 people in employment, versus 1,422,500 in CT.

Cape Town’s GDP in 2012 was put at $56.8 billion, by the Brookings Institute, versus $76 billion in Johannesburg.

In a city report for 2014, Cape Town said that it’s Gross domestic product (GDP)
accounted for 11.3% of South Africa’s GDP in 2012, ahead of Tshwane, at 10.1%, but behind Johannesburg at 16.7%.

In its most recent employment report, StatsSA said that for the year ended
December 2014, employment increased in five provinces, including Gauteng (58,000 new jobs).

Contrastingly, the Western Cape recorded the largest annual decrease in employment during this period, at 65,000 jobs.

How much for a Cappuccino?

Interestingly, a ‘Cost of Living Comparison’ between Cape Town and Johannesburg, by Numbeo.com found that you would need around R28,514 in Jozi to maintain the same standard of life that you can have with R28,000 in Cape Town.

This calculation used the group’s Consumer Prices Including Rent Index and assumed net earnings (after income tax).

It found that a litre of milk costs R11.69 versus R13.09, with a loaf of bread costing R10.59 against R12.31. A regular Cappuccino however, will set you back R18.75 in the touristy mother city, with the same cuppa costing R18.64 in Joburg.

It found that the average monthly disposable salary (After Tax) in Cape Town is R16,632, and R21,500 in Johannesburg.

According to Numbeo.com, clothing and shoes are more expensive in Joburg, along with transportation costs. Buying or renting property however, is far more expensive in Cape Town.

Best quality of life

Earlier in March, Mercer’s annual Quality of Living survey revealed, perhaps surprisingly, that Durban ranks above the country’s traditional economic powerhouse of Johannesburg, and Cape Town.

In the global ranking, Durban was listed 85th out of 230 cities, with Cape Town (91st) placing just above Johannesburg (94th).

In December, research conducted by trade union, Solidarity, found that municipal service delivery in the Western Cape is of a higher standard than in the rest of the country.

A separate report in the same month found that South Africa’s best-managed municipalities are in Gauteng and the Western Cape.

The Municipal Productivity Index (MPI) and Compliance and Governance Index (CGI) found that that the City of Cape Town had the top score, followed by Tshwane, and Johannesburg.

The MPI combines financial and other data to assess individuals’ ability to engage with local economies.

The CGI focuses on how well municipalities are meeting basic planning, reporting, financial management, and capacity requirements.

War of perception

In October last year, Luxury traveller magazine, Condé Nast Traveler, released the results of its annual readers’ choice awards – revealing Cape Town as the best city in Africa, and 4th in world.

City scores are an average based on six categories, rated out of 100: culture, friendliness, atmosphere, restaurants, lodging and shopping.

Condé Nast readers are less enamoured with Joburg, though – in a friendly city survey conducted by the magazine, Johannesburg was voted not only the unfriendliest city in the country, but also the entire world.

In November, however, Johannesburg was named the second most inspiring city in the world in the 2014 GOOD Cities Index – leading all South African cities in the title.

According to Good Magazine, an inspiring city is a hub for progress, engages its citizenry, has a vibrant street life, flourishes during crises and has high connectivity, diversity and a good work/life balance in sync with nature.

E-tolls weighs heavily against Johannesburg, although its remains to be seen for how much longer as government appears to have plans to implement this system in other provinces in the coming years.

But on the up-side, thanks in part to e-tolling and the major upgrade of the cities highways and main roads, Johannesburg has lost the top dishonour of being the country’s most congested city – a title which, according to Tom Tom’s data, now belongs to Cape Town.