[imagesource:goodfon]

Just like the clouds bellowing in over the mountains from the sea, more and more people are flooding into the Western Cape to start a new life.

For some time now, the Western Cape has been experiencing a rise in ‘semigration’ because of its political stability, good governance, and booming economic opportunities, as mentioned by speakers at the Western Cape Property Development Forum’s (WCPDF) Annual conference at the Cape Town International Convention Centre (CTICC) in May.

Dominique dHotman, chief strategy officer at Ooba Home Loans noted that 14% of the transactions in the Western Cape were from buyers outside in 2019, which is now close to 24 or 25% and sometimes even higher.

The Citizen noted that the Western Cape accounted for 29% of the company’s semigration home loan applications in Q1 2024.

“Right now, I think what we’re experiencing is that the Western Cape does certainly appear to be a much better-run municipality. Or a province, sorry, and obviously because there are many municipalities in the Western Cape and people are essentially voting with their feet and going to where they believe they will have better economic opportunities, better lifestyles and better futures for themselves and their families,” said dHotman.

Ooba Home Loans’ statistics show that semigration to Gauteng has declined from a high of 34% in 2019 to 25% in Q1 2024.

Pre-2020, the majority of semigration in South Africa was the result of workers flocking to Gauteng in search of employment opportunities in the City of Gold.

In the five years since, ooba Home Loans data shows a shift to the Western Cape, with inbound semigration (moving to the province) having more than doubled over this period.

While this is exciting in many ways, Capetonians are starting to feel the strain of semigration, noticing the increased price of properties and the longer queues at popular cafes and restaurants, which were trends once limited to the holiday seasons.

Indeed, analysing property data from the past five years shows just how big this ongoing trend really is.

Smart investors are taking advantage of the high demand for rentals in the Western Cape, buying investment properties at the highest rate in the last five years, according to Ooba Home Loans data.

While the majority (66%) of semigration property purchases in the Western Cape are for the purposes of using the property as a main residence, the percentage of investment/rental purchases have been steadily increasing, comprising 30% of Western Cape semigration applications processed in 2023.

The potential for strong rental returns and long-term capital growth in the Western Cape is drawing many investment buyers from other provinces, while there’s also been a rise in foreign buyers grabbing properties in the province’s tourist hotspots, often outpricing locals due to their stronger purchasing power.

Now that the pandemic has subsided and tourism is booming again in the Western Cape, property investors are wisely buying properties that can be rented out for both short- and long-term leases. Some are not afraid to drive up the prices quite substantially, and this is affecting the locals.

Overall, though, the effects seem to be more positive for now.

Deon van Zyl, WCPDF chairperson, said: “People are streaming into the Western Cape. So we are seeing our unemployment levels are lower than the rest of the country. Our market is attractive, the perception is that governance is good, so we are attracting capital, capital leads to investment, investment leads to jobs, people are coming.”

He concluded that we’re probably going to continue seeing this major economic/property boom in South Africa.

[source:citizen]