Semigration Surge: Western Cape’s Residential Property market set to soar

Western Cape is experiencing increased property activity than other Provinces

• Semigration contributes to sales and rental activity

• Households relocate to the Western Cape as the region is perceived to have better-run municipalities and offer quality lifestyles

• Buyers are finding good value for money properties

• High demand for properties in secure estates and gated communities with lifestyle amenities

Demand for rental properties

• Limited rental stock leads to rental growth in some instances

• One-bedroom apartments considered good buy-to-let investments

• Low risk of tenant default

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Landsdowne Property Group one of South Africa’s largest residential real estate managers and estate agency company says semigration to the Western Cape remains strong as people search for ‘quieter’’lifestyles.

The group continues to see increased sales and rentals in the Western Cape compared to other regions as many households in provinces like Gauteng and KwaZulu-Natal sell their properties to move to the Western Cape.

Jonathan Kohler, founder, and CEO of Landsdowne commented: “Semigration remains one of the key drivers in the Western Cape property market. Increasingly, more people, and businesses move to the region as it is perceived to have better run municipalities, have reduced load-shedding stages, and offer unrivalled lifestyles away from the hustle and bustle of Gauteng for example.”

Semigration – the movement of people from one province or city to another has been a trend even before the Covid-19 pandemic in 2020. With flexible working models enabling people to work from anywhere, many people saw this as an opportunity to move to other areas.

Data from Lightstone shows that the Western Cape continues to benefit from semigration as ratepayers seek better-governed municipalities with good infrastructure, governance, and unrivalled lifestyles. During 2019 and 2023, sales of properties priced between R100 000 and R20 million rose from 23% to 27%, while Gauteng saw sales fall from 43% to 29%. The Western Cape also recorded the highest increase in sales activity in smaller towns compared to Gauteng and KwaZulu-Natal.

Landsdowne is a sales and rental agency with over 35 000 apartments and freestanding clusters under management. As demand for property increases, the group reported successful property sales in areas including Blouberg, Sandown, Parklands, Parkland Norths and Sunningdale.

Kohler said these areas attract buyers and investors due to the lifestyle offering with sandy beaches, spectacular views of Table Mountain, good infrastructure, various amenities including schools, hospitals and medical facilities, entertainment, and shopping centres.

Buyers flock to secure estates in the Western Cape to seize opportunities

In response to a burgeoning demand for secure and tranquil living environments, buyers are increasingly drawn to properties in gated communities and secure estates, noted Kohler. From one-bedroom apartments in Cape Town starting at R795,000 to spacious three-bedroom family homes in Sunningdale fetching up to R3.195 million, the market offers diverse options, some with additional rental income potential.

Kohler highlighted the current buyer's market, with savvy purchasers and investors capitalizing on well-priced properties. Despite high interest rates hindering some buyers, those investing in the Western Cape enjoy better value for money compared to Gauteng. Additionally, the region is poised for quicker market recovery and higher capital appreciation, particularly in areas experiencing significant development.

In the rental market, high interest rates have bolstered the buy-to-let sector, driven by increased demand from individuals unable to purchase properties. Rental growth in the Western Cape, exceeding supply, has resulted in a 3.9% year-on-year increase, with average rentals reaching R10,118—making it the priciest province for rentals. Furthermore, tenant risk remains low, enhancing investment prospects.

One-bedroom apartments in Cape Town yield approximately 10.8% net rental yields, presenting attractive buy-to-let opportunities. In Sandown, rentals range from R8,200 in established complexes to R11,500 per month in new developments, offering investors a range of options.

Looking ahead, Kohler predicts the Western Cape will benefit from semigration, driving increased sales and rental activity in the region.

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