Goodbye Gauteng – the Western Cape’s semigration boom continues

Despite rising affordability pressures and talk of “reverse semigration”, the Western Cape is expected to remain South Africa’s top-performing residential property market in 2026.

This is according to independent economist John Loos, who expects the Western Cape to again be the outperformer in house prices and residential rental growth in the coming year.

The term “semigration” typically describes the skilled, middle- to higher-income segment of the population relocating to different regions in search of opportunity or a better quality of life.

Both the Western Cape and Gauteng have strong overall net population inflows. However, semigration usually refers to movement from Gauteng towards the Western Cape.

Much has been said in recent years about a strong net “semigration” rate in the direction of, especially, the Western Cape, and to a lesser extent, the KZN north coast and others, and a net outflow of such people from Gauteng.

But Loos noted that over the past few years, there has been growing talk of a “reverse semigration” trend emerging.

Some believe that the migration of skilled and more affluent households from South Africa’s most populous province, Gauteng, to the popular Western Cape has reversed.

The argument is that the relative affordability of homes in these two major property regions is a key reason for reverse semigration.

Indeed, Loos said the Western Cape’s relative affordability of housing, both for home buyers and tenants, has deteriorated significantly over the past few decades.

This largely reflects its relative popularity as a place to live, but also partly due to greater land scarcity in and around the City of Cape Town and other landlocked metros, especially Gauteng.

Western Cape home values have deteriorated significantly in relative affordability. Using StatsSA house price data, the average Western Cape house price has risen by 179.6% from January 2010 to September 2025.

In comparison, South Africa’s other two major housing markets have moved at a much slower pace, with Gauteng increasing by 79.7% and KZN rising by 76.7%.

The rental market has shown a similar deterioration in relative affordability in the Western Cape. The Western Cape CPI (Consumer Price Index) for Residential Rentals has increased by 128.6% from January 2010 to January 2026.

By comparison, Gauteng has increased by a far lesser 63.8% over the same period, and KZN by 76.9%.

The Western Cape still reigns

Even against the Western Cape’s declining affordability backdrop, though, Loos said there is little evidence of “reverse semigration”.

“To date, I have seen little evidence in any data of such a reversal in semigration, although good data on the matter is admittedly difficult to come by,” he said.

While it is true that, in any given period, household semigration occurs in both directions, the Western Cape has had a strong net inflow for many years, while Gauteng and others tend towards a net outflow.

Wise Move, a company offering relocation solutions, published its 2025 Migration Report last year, citing its own 2024 data and pointing to a very strong net outflow from Gauteng and a net inflow into the Western Cape.

Loos noted that these stats are interesting because such companies likely largely relocate skilled middle- and higher-income households.

He added that the Western Cape also has more property market outperformance drivers than current semigrants.

“I believe that many people place too much emphasis on current semigration inflows in explaining what drives the Western Cape’s housing market,” he said.

“The importance of the past two decades of net-skilled and affluent semi-grant inflows into the Western Cape must be emphasised here.”

This has led to a stronger cumulative build-up of the province’s skills and purchasing power base.

“The cumulative effect of this multi-decade semi-grant inflow puts the Western Cape in the likely position to outperform the rest in terms of economic growth, because a region’s skills base is a key driver of a modern economy,” he said.

Loos explained that the skills base not only drives the private sector directly, but also the government sector.

This likely implies that, for the foreseeable future, outperformance in infrastructure and service delivery will continue in many Western Cape municipalities, sustaining the region’s relative appeal and supporting its economy.

Loos pointed out that this is expected to lead to better job creation in the Western Cape than in other provinces.

Local residents can also be a key driver of property outperformance, boosting their property purchasing power faster than the rest of the country.

Superior economic growth

There are many factors which can be blamed for driving the Western Cape’s growing residential unaffordability crisis.

Some people focus on the impact of strong foreign buyers, others on short-term rental investment, while others may point to current semigration rates into the province as a key driver.

However, Loos said it may also simply be a period of looming superior economic growth in the Western Cape that turns out to be a key driver of housing market outperformance, along with the aforementioned factors.

According to Loos, recent data also shows little sign of the end of the Western Cape’s property market outperformance.

“And certainly, if one views the major provincial house price indices as at September 2026, StatsSA’s latest datapoints, one sees no apparent end to the house price growth performance of the Western Cape.”

At 9.3% year-on-year growth, Loos noted that the Western Cape’s growth rate dwarfs Gauteng’s 3.8% and KZN’s 2.7%.

Admittedly, all three provinces have shown house price growth accelerations of late, a function of each benefiting in the short run from mild interest rate cutting.

“The Western Cape’s Rental outperformance also shows no sign of abating.” StatsSA’s CPI for rentals shows the Western Cape’s residential rental inflation rate at 5.37% year-on-year, compared to KZN’s 3.3% and Gauteng’s 1.5%.