Semigrants are welcome in Cape Town City and province have the space

An influx of people and more developments will have positive spin-offs for the economy and business , experts say

CAPETONIANS who are concerned that their city may not be able to sustain the growing influx of residents from other parts of the country should not fear, experts say.

After all, not all semigrants are moving to Cape Town; some are choosing to settle in other areas of the province.

And even if they are choosing the Mother City as their new home, the municipality can cope.

Erwin Rode, the managing director and chief executive of Rode & Associates, which specialises in real state economics, property valuations, property research and town planning, says the Western Cape government and the City of Cape Town know what needs to be done to accommodate the growing numbers of residents.

Officials are “acutely aware” of the potential infrastructure problems posed by the influx of semigrants, and are working on the issues.

There may be a bottleneck, but he believes this will be temporary as the City will react appropriately and timeously.

Rode also does not believe that Cape Town will run out of space for its growing population.

“I personally don’t think there will be a limitation factor as the private sector is already increasing residential property development.

There are also areas north of the city that can accommodate new residential developments.”

Similarly, FNB property economist John Loos says the Western Cape, as a whole, can sustain the increasing numbers of semigrants “for many years”.

“You have to remember that there is Cape Town, and then there is the rest of the province.”

Even though people will not stop relocating to the city –despite its big city problems and challenges, including poverty and congestion – data over recent years has shown that semigration is growing in other areas like the Southern Cape and those on the west coast.

“More towns that were not previously attractive are now bringing people in, and not just semigrants but people from Cape Town and other parts of the province. These towns were never really seen as semigration destinations in the past.

“More and more towns are becoming favourable alternatives to Cape Town as the city fills up, becomes crowded, and sees exorbitant property values. This is also being seen in the Stellenbosch property market.”

Loos says the Western Cape is “quite a big province”, and that there are many towns untouched by semigrants.

And while many Capetonians may feel inconvenienced by the congestion in their city, there is also an economic and business upside to the influx.

“Semigrants, who are not only those with high-incomes and skills but people who are lowincome and moving to the city for a better life, greatly benefit the economy and businesses.

“They also drive the economy with their skills and higher incomes.”

Retirees, for example, are sometimes not working, but they are big purchasers and also good for retail. There are, however, challenges posed by increasing numbers of people moving to a particular place.

“Pressure is put on resources and infrastructure, particularly nature resources. This is where well-run councils are crucial as they need to plan for greater power and water supply, as well as work out how to preserve natural resources,” Loos says.

Higher volumes of tourists have the same impact on natural resources.

George, for example, needs to plan for “clever densification” if the number of residents continues growing.

Seeff Property Group agents say the demand for coastal property in the Western Cape continues unabated and that, in some instances, last year was notably better compared to the pre-pandemic period.

Coastal areas in the province that are proving to be popular alternatives to Cape Town include Hout Bay and Llandudno, Plettenberg Bay and Mossel Bay.

Hout Bay and Llandudno

Last year, says Stephan Cross, the manager for Seeff Hout Bay and Llandudno, Hout Bay ended with 457 transactions worth more than R1.3 billion in another record year.

The average transaction price also increased to R4.389 million, up from R3.518m in 2021. This was largely due to more sales at the higher price bands.

Llandudno ended with a record of 18 transactions worth more that R478m compared to eight sales worth R143m the year before. It also achieved a significant number of sales above R20m.

He says Hout Bay has become a great alternative for buyers looking to be close to the Atlantic Seaboard on the one side and the Southern Suburbs on the other side.

“It offers a great villagelike lifestyle, fully contained with great restaurants, schools, shopping and more. There are a number of desirable lifestyle estates in the area which contribute to the high demand.”

Plettenberg Bay

While it was expected that the Plettenberg Bay property market would ease towards the second half of 2022, it ended the year with around 800 transactions and an overall value which is somewhat staggering, at around R2.3bn, says Alet Ollemans, the licensee for Seeff Plettenberg Bay.

The number of transactions was, however, slightly down compared to the record year of 2021, but the overall value ended “very much on par”.

The average transaction price for Plettenberg Bay is now around R2.6m, about 4% higher compared to 2021 and about 30% up on 2019.

While the bulk of the transactions falls below R2.5m, she says there was “excellent activity” above this price band, with many sales above R10m and three above R20m, all in Seaside Longships. The luxury estates also continue seeing strong demand.

Mossel Bay

Herman Spies, the sales team leader of Seeff Mossel Bay, says the area has become the “darling” of coastal buyers over the past few years and, enjoyed another solid year in 2022.

The buying market is moving faster, and with less stock, and sellers were calling the shots towards the end of last year.

“Semigration, retirement and holiday home buyers continue to flock to the town for the excellent lifestyle and value on offer.”

The average price for full title residential property here is around R2.8m. Great areas to invest in include Dana Bay, with an average transaction price, according to Lightstone, of around R1.7m, Diaz at around R1.8m, and Island View and Reebok, both with an average of around R1.8m.

There is high demand for properties below R3m. Vacant land is under supplied and prices have doubled over the past 12 months.

Potential infrastructure problems are being dealt with to accommodate a growing population. PICTURE: TARYN ELLIOT/PEXELS