While some people have emigrated to other countries to escape South Africa’s apparent socio-economic decline, those who opt to stay may simply ‘semigrate’ to better provinces or areas.
Gauteng, with Johannesburg and Pretoria, remains the country’s economic powerhouse. Despite being the smallest province, it hosts almost 1 in 4 South Africans. It also contributes more than a third of GDP (Stats SA 2017) and more than 40% of consumer credit is granted within its borders (National Credit Regulator Q4 2022).
However, there has long been a trend of South Africans seeking out perceived lifestyle advantages by moving to other provinces. “KZN and, most notably, the Western Cape are favoured semigration destinations,” says national property trends expert and co-founder of Sentinel Homes, Renier Kriek.
Increased semigration
Before Covid-19, semigration often took one of two forms.
Firstly, whole businesses or business units would relocate to the Western Cape or KZN with their employees in tow. This practice continues as businesses seek better service delivery, such as the City of Cape Town’s ability to shield its residents and businesses from some of the effects of load shedding.
The second form was people who quit their jobs and accepted a pay cut to enjoy the so-called ‘lifestyle dividend’ of living closer to the shore, or in rural areas, or decided to move their families and commute to Gauteng by plane, to arrive at the same result.
After Covid-19, which normalised remote working, a third variant of the semigration trend arose.
Remote workers can now work from almost anywhere.
“This new development has led to increased semigration to outlying or previously less favoured areas, such as small coastal towns, where whole businesses and single job-seekers would rarely have ventured,” says Kriek.
These include West Coast towns such as Langebaan, St Helena Bay and Paternoster. The sleepy fishing village of St Helena Bay, for example, has 23 real estate agencies at last count, each with a number of agents selling and renting out property. The market for real estate there is booming.
Factors driving people to such destinations include the desire to escape higher levels of load shedding and crime, improved service delivery, a more relaxed social environment, and promising economic growth, job creation and infrastructure development.
Areas in demand
For lower income consumers, the Western Cape is attractive due to its lower unemployment rate (21.6% vs 32.9% nationally). The province is also reducing unemployment faster than other parts of the country.
In addition, it has an advantage in infrastructure, such as schools and hospitals, which are perceived to be superior.
Between February 2022 and February 2023, food prices in the Western Cape grew by 12.4%, which is much lower than Gauteng (14.2%).
“The semigration trend in the Western Cape is fairly broad-based whereas the northern coast is attracting more affluent earners from Gauteng,” says Kriek.
Similarly, unemployment in KZN (30.9%) and the Northern Cape (26.6%) is less than the national average.
Impact of semigration
While some areas are feeling the impact of semigration, others are witnessing economic growth as a result of this influx of new residents.
On the one hand, previously popular locations like the northern suburbs of Cape Town have become much busier due to semigration, with the roadways surrounding the city showing signs of being overburdened.
However, other favourite semigration destinations, like Mossel Bay, are enjoying beneficial growth and urbanisation.
In Mossel Bay’s case, this is due to its close proximity to George Airport, which makes commuting between Johannesburg and Cape Town’s suburbs easy and convenient.
It is also highly probable that the flood of semigrants to these areas could drive housing prices up. This could be either to the benefit of locals selling their property, or to their detriment if they wish to buy. In addition, existing homeowners could face higher-than-normal rates increases.
Prices in the Cape Town metro area have already far outpaced growth in the other urban centres. This factor, coupled with the inclination to seek greater value in times of rising interest rates, is driving buyers to hunt for property in outlying areas that could yield bigger bang for their buck.
“This trend is likely to continue and may intensify as national service delivery and infrastructure maintenance seem to lag behind the Western Cape,” says Kriek.
Availability of property
The supply of property may be hampered by over regulation of new construction while reducing the availability of affordable housing to lower income earners.
As demand outstrips supply, areas outside established urban and suburban districts will surely gain more attention from home seekers, and experience the same economic benefits and growth.
Kriek says that prospective semigrants should therefore take the plunge as soon as possible.
“There are other trends to consider apart from semigration when deciding where to live so it’s important to plan carefully; in addition, interest rates are already peaking so, if you can afford it, you will likely be better off in the future as long as you act now,” he says.
Renier Kriek is a national property trends expert and co-founder of Sentinel Homes.
