Semigration no longer just a buzzword as Cape property market feels the effect
Cape Town - Semigration is no longer just a buzzword - it has become an economic reality in the property market in Cape Town and the Western Cape.
Property market intelligence provider Lightstone’s average transfer values show the province is now home to nine out of 10 of the country’s top suburbs, according to Lightstone’s average transfer values.
More people moved to the Western Cape (3 317) last year than to Gauteng (1 639) and KZN (822) combined, and the province is now home to nine out of 10 of SA’s top suburbs.
The data shows most people moving are in the 49 to 64-age group, and most of that group are moving to the Western Cape.
The 36-49 age group makes up the second-largest category, and again the Western Cape is their preferred destination.
Lightstone’s data also shows the trend towards moving from metropolitan areas to smaller and larger towns or Cape Town can mostly be attributed to a move away from crime-and-grime and towards a slower, safer, quality lifestyle in the small to large towns.
“Semigrants are also attracted to the fact that municipalities are typically better run in the Western Cape than in other parts of the country.”
The data shows 46% of buyers moving to the Western Cape are more likely to move to a new property of greater value and smaller size, while 34% will downgrade size and value and 20% will upgrade size and downgrade value.
Overall, more people are downgrading (24% in 2015 to 27% in 2021) while fewer people are upgrading (37% in 2015 to 34% in 2021).
It shows that those upgrading had in fact fallen to 33% in 2019 and 2020, and the increase in 2021 might be a result of more people moving into larger homes which offer greater work-from-home flexibility.
MortgageMe home loan company director Andrea Tucker said the extended work-from-home policies of many companies and the proliferation of new, small home-based businesses are adding to this demand for space that can comfortably accommodate both family and work.
Lew Geffen Sotheby’s International realty Southern Suburbs and False Bay expert Claude McKirby said semigration had caused a notable drop in the difference between asking and selling prices in most areas, especially in the Southern Suburbs, where top schools and lifestyle are key attractions.
McKirby said: “Semigration is not only driving the relocation of families, but also businesses to the region and this has resulted in a spike in the demand for business premises, both to buy and to rent.”
He said stock was becoming an issue in the Southern Suburbs, especially in the more sought-after areas with good schools, and that the same trend was playing out in the Northern Suburbs.
He said there has also been a notable uptick in enquiries across the Cape Peninsula from Muizenberg to Noordhoek since mid-2021.
“This scenic coastal strip not only offers the quintessential seaside village and outdoor lifestyle, it does so at more accessible pricing than most comparative coastal areas and it also offers a broad selection of properties.”
Seeff Property Group Atlantic Seaboard and City Bowl expert Ross Levin said luxury apartments sold on the Atlantic Seaboard represented 25 of the highest prices paid in the country this year, three of which sold above R50 million.
Speaking of expectations for 2023, Rawson Property Group MD Tony Clarke said the Reserve Bank was last year forced to implement a much steeper interest rate increase than had been forecast.
As such, the property market saw buyer activity slowing, alongside an increase in distressed sales and downscaling.
He said this imbalance in supply and demand led to sluggish property price growth, with inland provinces facing additional pressure from ongoing semigration trends to coastal areas.
Clarke said he expected these trends to continue into 2023, with nominal price growth remaining positive, but subdued for some time to come.
Commenting on the trend, Premier Alan Winde said: “People are choosing to relocate to the Western Cape for a variety of reasons, namely improved socio-economic opportunities and better service delivery.
“We are also intensifying efforts to beat back load shedding by becoming less reliant on Eskom. This is a province that is showing what could be done in the rest of the country.”
On Friday, Mayco Member for Economic Growth James Vos said the City's efforts to maintain current infrastructure and rolling out future projects made a great investment case for the region.
mwangi.githahu@inl.co.za