Why emigrate when your clients can semigrate?
The Western Cape’s appeal to South Africans seeking a better lifestyle within the country is driving semigration to the province. Scenery and good schools are all lures, spurring more property trading
The somewhat tongue-in-cheek word semigration, for South Africans, is used to describe the migration of those who do not want to, or are financially unable to, leave their beautiful homeland, so they move to a place within the country’s borders that offers a better lifestyle.
That may be a reference to improved schooling, a sense of security, a more cosmopolitan, even international flavour, a country setting, political stability, a cleaner environment or all of the above. For the past few years, semigration has been the descriptive term for those who move south – to the Cape and environs – and it has spawned some wry commentary and jokes of secession. Bluntly, the Western Cape is almost considered another country – yet not.
When semigration was first integrated into the local lingo, the move Capewards appeared to be driven by retirees. Areas such as Somerset West became retirement paradises. Although it is still a trend, it is no longer the driver for semigration. The current cost of property alone may be the wet blanket for cash-strapped retirees. In recent years it has been young families who, instead of cutting ties and building a life for their children in another country, fly south. Schooling and tertiary education is superb, lifestyle outstanding, landscape glorious and generally, tomorrow is more predictable.
It is largely those from Gauteng who are arriving, injecting massive funds into the Cape property market, and everybody has been reaping the financial rewards. In a Moneyweb article on emigration/semigration, Magnus Heystek, investment strategist for Brenthurst Wealth, pointed to the latest FNB Property Barometer: “During Q1 2016, the Western Cape house price index rose 12% year-on-year, compared to the Eastern Cape, which increased by 7.6%, KwaZulu-Natal by 5.6% and Gauteng by 3%. This increase can be attributed to the rising demand for property in the Western Cape, driven by the increasing rate of semigration among upcountry buyers.”
Some semigrators move lock stock and barrel. Others make their Cape holiday destination into permanent homes and some breadwinners commit to the weekly commute. With Lanseria adding to the airport offering in Johannesburg, along with the Gautrain, commuters settle the family in the Cape and either work full time in Johannesburg Monday to Friday or access it whenever necessary. Sophisticated communication and easy transport links have made this a feasible option.
There is no arguing the beauty of Cape Town, compounded by the fact that the metro is deemed highly functional. For the national and international investor, it has been the jewel in the South African property crown.
Seeff Properties chairman Samuel Seeff says: “The Cape lifestyle is obviously appealing, but more so, it is seen as well-managed by the DA, the city and surrounds are clean, and there’s good governance. The fact that it not only attracts people to the metro, but that buyers are prepared to pay more for property, illustrates that property buyers/people want to live in a clean and well-managed area.
“As many as one in five buyers across the Cape metro – 20%-30% depending on area – emanate from outside the city, most from the north (especially Gauteng, Johannesburg and Pretoria), but even from Durban. It’s not just the Cape metro, but areas as far afield as the Winelands – mostly Stellenbosch and Franschhoek, but also Paarl – and the Garden Route, especially George, are seeing an influx of buyers from other provinces boosting activity. This is, in part, why the Western Cape property market continues to perform better than, say, Gauteng, from a price and even demand point of view, when you look at percentages.
“Prices in the Cape are surging ahead of other metros, again especially those of Johannesburg’s northern suburbs. In top-end areas such as the Atlantic Seaboard (Clifton, Bantry Bay, Fresnaye, Camps Bay and the Waterfront), top-end properties can sell for 30%-40% more compared to the top-end Johannesburg/Sandton areas of Sandhurst, Westcliff , Dunkeld, Morningside and Bryanston.”
Schalk van der Merwe, Rawson Property Group’s franchisee for Somerset West, says semigration is no sudden flash in the pan. “It is an ongoing phenomenon that has been evident for some time and one which is giving a huge boost to Cape property. Last year, a staggering 46% of the homes sold by our franchise were to upcountry buyers. Discussions with our George and Knysna franchisees confirm similar numbers of buyers coming to them from the north.”
Stephen Lubbe, Rawson Property Group’s George franchisee, concurs: “Semigration into George from around the country is now conservatively estimated to be about 50 families per month – significant enough numbers to have a real effect on the property market. New construction is also speeding up, with developments such as Kraaibosch Country Estate, Kraaibosch Manor and Blue Mountain Lifestyle Estate growing at pace.”
Says Andrew Golding, CEO of Pam Golding Properties: “It’s obvious that Cape Town’s coastline and mountains act as a major constraint on the city’s ability to expand, which goes some way towards explaining the outperformance of the Cape housing market.”
He adds: “Another contributing factor appears to be the net in-migration of homeowners from other provinces. According to FNB analysis, the percentage of repeat buyers moving between provinces has risen from just 6.4% during the 2008-09 recession to a high of 12.9% last year. Typically periods of strong economic growth generate an increase in interregional migration as people move to areas experiencing greater economic activity and generating employment opportunities.
“With the national economy entering its fifth consecutive year of stagnant growth, one would have anticipated that this mobility would be slowing. Yet the FNB study suggests that it remains relatively high. This, it is argued, is due to a structural change, which has taken place in recent years, seeing the Cape greatly enhancing its relative appeal,” Golding says.
“A healthy economic growth rate and perceptions of a high-quality lifestyle offered by the City of Cape Town and its surrounds appear to be attracting both wealth and skills to the province. As a result, the Western Cape has the lowest percentage of repeat buyers leaving the province, as well as by far the strongest net inward migration of repeat buyers from other provinces.”
Semigration to the Cape is a reality and it will be interesting to see how this trend plays itself out in the light of current local and global variables.
Words Anne Schauffer