Gauteng buyers have significantly shaped the Cape property market. After a decline in semigration during the water crisis, the semigration market picked up notably by late 2020, especially over the last year, says Ross Levin, licensee for Seeff Atlantic Seaboard and City Bowl.
This is in part due to an ability for remote working and people wanting space and outdoor lifestyles, he said.
A recent Lightstone report noted that some 43% of Gauteng buyers moved out of the province in 2020, up from 39% in 2019. Most of these make their way to the Cape. In terms of the general movement of people, some 35% of semigration buyers moved to the Cape last year.
Besides relocations to Cape areas such as the Atlantic Seaboard and City Bowl, there has been a notable uptick in investment into second homes. “The area also has a vibrant investment market given that it has a high demand for residential and holiday rentals,” Levin said.
“Following the pandemic-induced market decline, we have seen a notable bounce-back, aided by renewed semigration and second home purchases across the Atlantic Seaboard and City Bowl.”
Transactions over the last twelve months amounted to over R7.8 billion. While about 76% of sales fall below R10 million, a notable 64 sales were concluded above R20 million to the combined value of over R2.4 billion. “The market is currently so hot that some twelve high-value sales were recorded for February,” said Seeff.
Levin said semigration buyers easily comprise around 20% of buyer enquiries and are primarily from the greater Johannesburg and Pretoria areas. They are typically happy to spend a bit more on property in Cape Town, partly due to Gauteng being the wealth hub of South Africa.
“They tend to invest in a diverse choice of homes, from apartments to houses and villas across the price bands ranging from around R3 million for an apartment to well over R30 million for a villa. We have also seen strong semigration interest and purchasing in our new luxury security estate, The Ridge Estate,” said Levin.
Cape Town continues to be the best run metro in the country, which is a critical drawcard, added Seeff. You can add to the quality of life and beautiful coastal setting complemented by excellent service delivery, infrastructure, and amenities.
“Many people come here and set up their own businesses while those who can will commute to Joburg,” said Levin.
As a primary second home destination, Cape Town and the Atlantic Seaboard and City Bowl, in particular, are highly desired property investment prospects. “While the highest volume of sales is below R10 million, we have also seen excellent activity to around R18 million along with high-value trophy home sales.”
Reasons for semigration to the Western Cape
Lightstone data showed that:
- Most people are moving to the Western Cape, up to 35% in 2021 from 31% in 2020.
- Most people moving to the Western Cape are in the 49-64 age group, while the 36-49 age group makes up the second-largest category;
- People moved to cities and towns in municipalities with functional service delivery.
- A substantial increase of homeowners moving out of Gauteng – despite being South Africa’s economic centre – increased from 39% in 2019 and 2020 to 43% in 2021, the highest it has been in the last seven years.
The data shows that Mossel Bay is the top destination for semigrants to the Western Cape, followed by the seaside suburb of Milnerton and the city of Cape Town itself.