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Is the semigration trend reversing?

Is the semigration trend reversing?

MAIN IMAGE: Isaah Mhlanga, Chief Economist at RMB, and Rory O’Hagan, principal of the Chas Everitt Hyde Park and Sandton

Senior writer

Over the last year, semigration, predominantly to the Western Cape, has been the trend to watch. While Gauteng has earned one negative news headline after the other, is the tide turning? If so, it could be partly due to South Africans coming home from abroad.

Gauteng is (still) where the opportunity lies

Isaah Mhlanga, Chief Economist at RMB, made the point that despite the apparent semigration phenomenon to the Western Cape from Gauteng, the revisions to provincial GDP statistics suggest that the proportion of the Gauteng economy remained relatively unchanged at 33.1% in 2022 from 33.2% in 2013,” Mhlanga said. “On the other hand, the contribution of the Western Cape to national GDP moderated to 13.9% in 2022 from 14.1% in 2013.”

Vocal on the issue is Rory O’Hagan, principal of Chas Everitt Hyde Park and Sandton, who also highlights KZN’s R250-billion contribution to local GDP, which after Gauteng (R448-billion) leads the Western Cape (R210-billion). “This proves that there are definitely more economic opportunities in Gauteng.”

Around 400,000 South Africans have chosen to repatriate since 2009, citing reasons that extend from missing family and friends and the SA lifestyle to the discovery that the grass is not necessarily greener on the other side.

Many returning ex-pats are choosing Gauteng over any other province because the semigration flight favouring the Western Cape saw property prices boom in the southern province and reversed in Gauteng. As such, expats find their euros, pounds, or dollars stretched further than in their adopted countries. “Expats are really diving into the sub-luxury sector between R5 million and R10 million, and in the northern suburbs of Johannesburg in particular,” says O’Hagan. “Sellers in this sector are now more willing, after price counselling to accept between 30-40 percent less than when their properties were listed.”

“We receive enquiries daily from South Africans of all ages who have been living and working abroad, sometimes for many years, but are now returning to Johannesburg to take up new corporate jobs or to establish new businesses.”

It’s similar in terms of semigration reversal. “Frankly, many top executives and professionals are now weary of the costs and inconvenience of commuting weekly between work in Johannesburg and family in Cape Town, while others admit that they have not adapted well to the Cape’s unpredictable weather and would prefer the Highveld’s sunny winters,” confirms O’Hagan.

Limpopo migration to Gauteng

According to migration data from the 2022 Census, the most significant provincial influxes into Gauteng are from Limpopo; of the 4 million people who have migrated to Gauteng, a third come from this northern province. Last year, Statistician-General Risenga Maluleke said that the Limpopo migration was concerning as it leaves Limpopo with a shortage of skills. “Nobody wants to stay in an underdeveloped area,” she said. “This particularly drives young people …. they move when they are young … they get trained, and never come back.”

People are buying in Gauteng

Data from the February BetterBond Property Brief shows that during the 12 months to Jan 2024, Gauteng continued to dominate the home loans market with the BetterBond regions of Greater Pretoria and the two Johannesburg regions, accounting for more than 52% of all home loans awarded. After Gauteng, the Western Cape and KwaZulu-Natal recorded the next best home loan activity.

Future outlook

Of course, the property market is cyclical, but so are migration cycles. There will always be a positive or negative reversal economic impact of migration between different countries or provinces chosen by migrators. What will dramatically impact migration patterns as we move into the future are effective and ineffective local governance structures, ongoing inequalities, infrastructure developments, and even global events that cause unrest.

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