Cape Town gunning for Johannesburg’s crown
Cape Town is increasingly becoming a major economic hub in South Africa as the city benefits from better service delivery compared to its peers.
While Johannesburg remains South Africa’s primary economic hub by some distance, Cape Town is gradually closing the gap.
In the Oxford Economics Global Cities Index for 2024, Cape Town gained ground on Johannesburg as the country’s economic hub suffered from mismanagement.
Joburg remains the best city in South Africa but dropped to 380th in the world, mainly due to its declining quality of life, which ranks 923rd in the world.
The declining quality of life is primarily attributed to failures in basic service delivery, from electricity to water and road infrastructure.
This stands in stark contrast to Cape Town’s quality of life, which continues to improve due to enhanced service delivery.
Cape Town has recently been recognised as the Best City in the World for 2025 by Time Out, a global authority on city culture, travel, and experiences.
Renowned for its natural beauty and exceptional infrastructure, Cape Town continues to attract international acclaim as a top destination for leisure, business, and iconic global events.
Provincial head for Business Banking at Standard Bank, Cliff Mayinga, said this creates substantial opportunities for local businesses to benefit.
The city’s annual influx of international and domestic visitors creates substantial opportunities across hospitality, logistics, catering, and tourism.
Mayinga said this has positioned it as a hub for economic growth and business development.
The benefit is also not only limited to small, local businesses but increasingly mid-sized businesses and big corporations that provide services to the commercial sector.
Cape Town’s growing international profile provides companies with natural opportunities to expand their footprint.
Mayinga said local entrepreneurs can develop bespoke products, establish new supply chains, and offer uniquely South African experiences that attract tourists and investors.
Additionally, Cape Town’s positioning as a gateway to Africa aligns with the aims of South Africa’s largest banks to expand their offshore offerings and increasingly fund the expansion of businesses into the continent.
Sector-specific financing, such as agriculture, hospitality, and tourism, is becoming increasingly popular in Cape Town as these sectors play a crucial role in its economy.
As Cape Town continues to shine on the world stage, the benefits of this recognition are poised to extend far beyond the immediate tourism and events industries, Mayinga said.

Cape Town’s growth as an economic hub can be seen clearly in commercial real estate data, which shows that Cape Town has bounced back more strongly than its peers from pandemic-era lockdowns.
Cape Town’s enhanced service delivery has also resulted in its commercial real estate sector bouncing back strongly from the pandemic-era lows.
A high vacancy rate above the pre-pandemic level exerts pressure on office rental prices, the Reserve Bank said in its latest Financial Stability Review.
Although there are signs of recovery in vacancy rates, they have yet to return to pre-pandemic levels, and this continues to exert pressure on real rental prices.
There are notable differences in trends among provinces. The trend of semigration to Cape Town has resulted in a stronger recovery in vacancy rates and real rentals for Grade A offices in the Western Cape region.
However, this has not come without its problems, as the rapid appreciation of Cape Town’s property values has resulted in some arguing that locals are being priced out of the market.
The Western Cape has the highest rental prices in South Africa, with the average rent 21% higher than the national average.
Many factors contributed to the high rental prices, including semigration, low housing supply, rising interest rates, and booming tourism.
Cape Town also has a long history of elevated property prices compared to other cities in South Africa due to the shortage of land in the city.
This has been exacerbated by the rise in digital nomads living in the city, which locals have blamed for the rise in rental prices in the city.
Digital nomads are skilled professionals who travel widely while working remotely using technology and the internet.
However, digital nomads are not the only players in Cape Town’s property market driving up prices, with semigrants from Gauteng and tourists contributing to rising prices.
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