South Africa’s rich fleeing Gauteng for the Cape

Rich South Africans are leaving the country’s economic hub of Gauteng to move to Cape Town and surrounding towns in the Western Cape, largely due to municipal mismanagement in Johannesburg and Pretoria. 

This was revealed by Henley & Partners in its annual Africa Wealth Report, which details where the richest people on the continent live. 

South African cities continue to be the most popular in Africa for millionaires to live in, making up six places in the top ten. 

At the city level, Johannesburg is the wealthiest in Africa, with 12,300 millionaires, 25 centi-millionaires, and two billionaires. 

However, the number of millionaires living within its boundaries has declined by 44% over the past decade, with many moving to South Africa’s coastal areas. 

Pretoria has seen a slightly less steep decline, losing 30% of its millionaire population over the past decade.  

In contrast, the country’s other centres of wealth, which are spread around the Western and Eastern Cape, are seeing a surge in their millionaire population. 

Cape Town is the largest beneficiary of this semigration trend, with the number of millionaires in the city rising 20% in the past decade. 

Cape Town is on track to overtake Johannesburg to become Africa’s wealthiest city by 2030, and Henley & Partners expects several major Johannesburg-based companies to move their head offices to the city by then.

The company estimates the city’s millionaire population will nearly double over the next decade, while Johannesburg’s will continue to decline. 

Smaller towns in the Western Cape, particularly those in the Cape Winelands region, are set to also experience an influx of millionaires in the coming decade. 

The Winelands region saw a 28% increase in the number of millionaires living there in the past decade. This will accelerate into the 2030s. 

The Garden Route and the Whale Coast are also booming, with their millionaire populations growing by 32% and 35%, respectively, in the last ten years. 

This trend is also seen in the country’s property market, with Cape Town booming along with many smaller towns in the Western Cape. 

The declining quality of service delivery in Johannesburg fuels this trend, as many who can afford to will move to better-run parts of the country. 

Research from Henley & Partners and New World Wealth shows that millionaires move based on their personal safety and security, basic service delivery, and political stability. 

Cape Town’s property prices have been boosted by increased semigration within South Africa from the country’s northern areas down to the coast and by increased foreign purchases of property in the city. 

These trends have also stimulated the property markets of smaller towns in the Western Cape, such as Plettenberg Bay and Hermanus. 

Pam Golding CEO, Dr Andrew Golding, said that foreigners and locals are particularly attracted to the well-managed Cape Town Metro and the diverse lifestyle offerings from the Atlantic Seaboard. 

Cape Town has already seen an influx of international buyers active in the market – not only in the top end but across all price ranges, demonstrating confidence in the City’s property market.

Golding said another factor is that South Africa offers exceptional value for money.

In Cape Town, for example, $1 million will enable you to acquire a residential property of approximately 200 sqm. For comparison, the same price tag will only secure 33 sqm in New York, 34 sqm in London, 43 sqm in Paris, 44 sqm in Sydney and 17 sqm in Monaco.

Furthermore, this does not compromise the lifestyle offered in South Africa, which is among the best in the world, said Golding.