Cape Town’s high cost of living is benefiting Johannesburg as professionals increasingly head back to SA’s economic hub.
Jonathan Kohler, CEO of Landsdowne, one of SA’s largest residential real estate managers, said Cape Town’s high municipal rates — justified by better services — are squeezing consumers.
He said the further rates increases, which are expected soon, are likely to deepen the cost burden and drive more people to Johannesburg’s more affordable lifestyle.
“Cape Town remains a top draw for high net worth individuals and semigrants, with net migration to the Western Cape up 22.5% year on year. But a growing wave of reverse semigration is seeing residents return to Johannesburg in search of better value and practicality,” Kohler said.
The latest BetterBond Property Brief points to renewed stability in SA’s housing market, with home loan applications up 2.2% year on year — reversing a 15% drop in 2024. The average purchase price rose to R1.6m, with first-time buyer activity also improving.
Still, Cape Town’s cost of living remains extremely high. Kohler notes that rental apartments in the city average more than R16,000 a month, compared to just R6,000 in a well-located northern Johannesburg suburb. In some parts of the city, parking is in such high demand that a bay sold for R1m in 2020, while an empty plot in Clifton fetched R170m last year.
The Western Cape led in building activity, with a 24% increase in residential completions reflecting strong demand, particularly in Cape Town. Gauteng saw a 30% decline, but its relative affordability and easier access to finance continue to make it an attractive option, Kohler said.
“While the Western Cape retains premium appeal, Johannesburg’s pricing advantage and improving lending conditions suggest its property market still holds significant long-term value.”
According to Landsdowne, the average home price in Johannesburg is R1.3m compared to R2.1m in Cape Town, which means larger homes and more room to grow, particularly for middle- and lower-income families who want to get on the property ladder.
However, Kohler believes the stagnation in Johannesburg’s property market may signal a turning point. Lightstone’s March 2025 report shows average prices holding at R1.3m, with sales steady at R47bn in both 2023 and 2024 — an indication that the market may be bottoming out and is better positioned for recovery.
“SA’s urban migration is no longer a clear-cut coastal story. While Cape Town’s luxury and short-term rental markets remain strong, Johannesburg is gaining ground for long-term value and accessibility. As semigration trends shift, savvy investors will adapt and position themselves for emerging opportunities,” Kohler said.
Additionally, Cape Town’s average salaries and worsening traffic — the city is ranked the seventh-most congested globally — are prompting renewed interest in Johannesburg. While the city faces infrastructure challenges, its role as SA’s commercial gateway and its cost advantages still outweigh the trade-offs for many.
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