Thinking about semigration? Do it now

If you are thinking about semigration, do it now while you can still secure – and afford – a place in another province.

Gauteng, with Johannesburg and Pretoria, remains the country’s economic powerhouse and despite being the smallest province, it hosts almost one in four South Africans. It also contributes more than a third of gross domestic product (GDP) and more than 40% of consumer credit is granted within its borders.

South Africa is not new to semigration and there has long been a trend of South Africans seeking out perceived lifestyle advantages by moving to other provinces. “KwaZulu-Natal and most notably, the Western Cape, are favoured semigration destinations,” says national property trends expert and co-founder of Sentinel Homes, Renier Kriek.

Before Covid-19, semigration often took one of two forms. Whole businesses or business units would relocate to the Western Cape or KwaZulu-Natal with their employees and 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.

People also quit their jobs and accepted a pay cut to enjoy the so-called ‘lifestyle dividend’ of living closer to the ocean or in rural areas or decided to move their families and commute to Gauteng by plane.

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Semigration after the pandemic

After Covid-19, which normalised remote working, a third variant of the semigration trend arose and 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 jobseekers would rarely have ventured.”

These include West Coast towns such as Langebaan, St Helena Bay and Paternoster. Kriek says 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 rolling blackouts and crime, improved service delivery, a more relaxed social environment and promising economic growth, job creation and infrastructure development.

The Western Cape is attractive to lower-income people 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, while it also 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 in Gauteng where food prices increased by 14.2%. “The semigration trend in the Western Cape is fairly broad-based whereas the northern coast is attracting more affluent earners from Gauteng.”

Unemployment in KwaZulu-Natal (30.9%) and the Northern Cape (26.6%) is also less than the national average.

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How semigration affects different areas

Semigration affects different areas in different ways. While some areas are feeling the impact, others are witnessing economic growth as a result of this influx of new residents.

“On the one hand, previously popular locations such as 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, Kriek points out, other favourite semigration destinations, such as Mossel Bay, are enjoying beneficial growth and urbanisation. In Mossel Bay’s case, this is due to its proximity to George Airport, which makes commuting between Johannesburg and Cape Town’s suburbs easy and convenient.

“It is also highly likely that the flood of semigrants to these areas could drive housing prices up and 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.”

He says 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.

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Trend likely to continue

“This trend is likely to continue and may intensify as national service delivery and infrastructure maintenance seem to lag behind the Western Cape.”

The supply of property can 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 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 and therefore it is important to plan carefully. Interest rates are already peaking and if you can afford it, you will likely be better off in the future as long as you act now.”