South Africans flood to Western Cape where things work – boosting property market

The Western Cape property market is set to benefit from the rising trend of ‘semigration’ as South Africans search for regions where “things work”.

This is the view of FNB property strategist John Loos, who said South Africa’s property market, in general, is set for a better year in 2024.

In FNB’s Property Insights Note, Loos identified municipal and utilities service reliability as a key theme for 2024. This comes as rising rates and tariffs pressure net property operating income.

Municipal rates and utility tariffs continue to rise at rates well above general inflation, a further source of pressure on net property operating income. 

“While we assume a better year for electricity supply, we expect that the search for areas and regions where ‘things work’ is likely to remain a key feature in the current market in 2024,” he said.

This feature will cause considerable household and business activity ‘semigration’ to continue into 2024 – and the Western Cape property sector is set to benefit from this.

Semigration – moving to another location within a home country – is expected to boost the Western Cape’s economy and its property market.

As such, the Western Cape is expected to continue to outperform the rest of the major commercial markets in 2024.

In 2023, the Western Cape saw the strongest growth in house price inflation among the three major regions in South Africa, and Cape Town was the only major metro housing market where prices stabilised rather than declined.

This was revealed by the Pam Golding Residential Property Index, which said that while the national house price inflation rate has shown clear signs of stabilisation in recent months, the country’s soaring inflation rate took its toll on growth in real prices. 

However, with inflation under control, the outlook for real national house price inflation is markedly more positive in 2024.

The Western Cape housing market has registered the strongest growth among the three major regions during the past four years, including the year to date, with KwaZulu-Natal following in second spot.

In addition, house price inflation in all major metro housing markets is losing momentum, except Cape Town, where price growth stabilised at 3.8% in recent months. 

Pam Golding CEO Andrew Golding previously said that demand for property in Cape Town is booming as tourists return, foreigners buy local property, and South Africans emigrate from the country’s northern regions. 

He said they are seeing a significant increase in demand from tourists and South Africans wanting to semigrate to the Cape.