3 Apr 24

Unpacking the 2024 budget speech Implications for South Africa’s property sector

In a landscape where understanding regional dynamics is crucial for insightful decision-making, Rainmaker Marketing’s Property Report serves to provide meaningful insights into different areas and precincts across South Africa. This year’s first quarter, Rainmaker Marketing focuses on key growing areas within the Western Cape, namely Somerset West and Stellenbosch.

The latest comprehensive research report sheds light on factors driving the province’s unparalleled appeal. From the booming semigration trend to the strategic investments catalysing growth, the insights offer a clear, actionable understanding of what makes Stellenbosch and Somerset West a benchmark for growth, quality living and economic resilience. This article ventures into the heart of the Western Cape, exploring the region’s magnetic allure through in-depth analysis, revealing why towns like Somerset West and Stellenbosch are at the forefront of this transformational shift.

Semigration

Cape town property market

The Western Cape has undoubtedly enjoyed the lion’s share of the semigration trend. It’s the top choice for people moving within the country, with the number of people moving there steadily rising from 31% in 2020 to 46% by 2023.

Over the last 26 years, the Western Cape has become the 3rd largest province in South Africa, according to StatsSA. From extensive plans to generate its own energy, substantial spend in infrastructure and the resulting opportunities for growth, it is quite clear why it has become a preferred home amongst families and professionals.

Some of the key reasons people are semigrating to the Western Cape is due to service delivery, infrastructure, security, travelling routes and a general better quality of living.

For instance, the Municipal Economic Review & Outlook 2023 reveals impressive access to essential services in the province. Nearly all residents have access to water (99.4%), electricity (96.6%), solid waste removal (97.9%), and improved sanitation (95.2%). The region boasts a high number of municipalities with clean audits, including 22 out of South Africa’s 41. It’s no secret how efficient the service delivery and governance of this province has evolved.

Western Cape property market

Building activity in the Western Cape underscores the region’s developmental momentum and the building plans passed for the province far exceeds the country’s average. For every five buildings completed in South Africa between 2022 and 2023, two of these are within the Western Cape.

The BetterBond Property Brief from March 2023 points out that the Western Cape, KwaZulu-Natal, Free State, and parts of Johannesburg offer the best value for your money when buying property. In late 2023, more affordable homes in the Western Cape were in high demand, leading to a shortage as more people chose to buy less expensive homes. On the other hand, the pricier properties, particularly those along the Western Cape’s coast, started to see a return-to-normal-market-conditions after a boost from people moving to the area. While these high-value areas initially benefited from the influx, the market is balancing out.

The Western Cape’s proportion of property sales were between R100 000 – R20 million (2019 – 2023) and the sales share increased from 23% to 27% across South Africa, with property prices in the region increasing by 10% from August 2022 to August 2023. There’s also been a rise in sales activities across 170 towns, with the Western Cape leading the way, with 45% of the share, followed by KwaZulu-Natal at 13% and Gauteng at 3%. There is a clear preference for the Western Cape among homebuyers.

Stellenbosch

Stellenbosch Property Market

Located +-50km from Cape Town and bordered by major routes such as the N1 and N2, Stellenbosch is known as the second oldest town in South Africa. This region celebrates being the cradle of the first wine route in South Africa and is home to diverse architectural heritage and cultures, the University of Stellenbosch further enriches the town.

Between 2011 to December 2023, the population within the region has increased by 26%. Stellenbosch alone sees approximately 103* adults per month moving to the region, which equates to 41** families. Since Nov 2021, the average household income has increased by 31% in Stellenbosch, with a higher 50 – 65+ year old buyer market.

Somerset West

Somerset West is nestled between the Helderberg Mountains, Cape Winelands and False Bay. The area is conveniently located 30 minutes from Cape Town and the international airport. Somerset West is a region known for its golfing, hiking, fine dining, significant German population and its educational excellence. The statistics provided within the report also share insights into Macassar, which forms part of the greater Somerset West area.

Between 2011 to December 2023, the population within Somerset West has increased by 10% and Macassar by 70%. Somerset West alone sees approximately 29* adults per month, which equates to 12** families and Macassar 100* adults per month, which equates to 40** families. Since Nov 2021, the average household income has increased by 8% in Somerset West, with a higher 50 – 65+ year old buyer market. While Macassar’s average household income has increased by 45% since Nov 2021, with buyers below the age of 35 and also those between 36 – 49 years.

From the high accessibility to essential services and exceptional educational institutions, to the dynamic economic growth and robust investment in future-ready infrastructure, the Stellenbosch and Somerset West regions stand out as premier destinations of growth.

Download the full report

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