Big middle-class exodus from Joburg
A growing list of service delivery issues – including countless potholes, water and electricity issues – has contributed to an exodus of middle-class South Africans from Johannesburg to the Western Cape and overseas.
Cy Jacobs, chief executive of asset manager 36One said that the phenomenon has grown rapidly since before the start of the Covid-19 pandemic, with some homeowners effectively abandoning their homes in Gauteng, to move.
“Services are almost non-existent and there (are) potholes the size of small suburban dams across many Sandton roads. It is very difficult to have a constant supply of electricity, which is obviously a national problem, and there have been ongoing water issues which have hit areas for days at a time,” he told radio station CapeTalk.
This has led to a direct drop in property values in some areas, and a loss of value of as much as 25% in some Sandton suburbs over a five to six-year period, Jacobs said. He added that because many of these homes are bonded to the bank, it becomes better to simply leave the house, rather than try to sell it.
This, combined with increased water and lights bills has led to a growing number of homes in these suburbs no longer being assets.
Jacobs said that middle-class South Africans from Johannesburg are now simply packing up and leaving – both through emigration and semigration.
“We have seen a large number of people unable to find employment in South Africa. There are young adults coming out of university unable to find work and relocating offshore, with their parents subsequently following them.
“There is still a very big exodus away from South Africa and people who are moving to what we call ‘zoom towns’, where they can work online.”
Sandown, centre of Sandton, previously wealthy Northern Suburb, now with many abandoned houses, foreclosure notices and overgrown foliage, guessing banks problems as values dropped so much so better to abscond. JHB problem pic.twitter.com/xzEskaPWXJ
— Cy Jacobs (@Cy36ONE) January 23, 2022
Property experts say that South Africa’s semigration trends are not slowing down, despite the easing of restrictions introduced during the pandemic.
Data published by analytics group Lightstone Properties in January shows that Gauteng residents and semigrants from other South African provinces are buying more properties in the Western Cape, but that there had been a general trend towards coastal towns from wealthier South Africans.
“We are seeing a substantial increase of homeowners moving out of Gauteng – despite it being South Africa’s economic centre – an increase from 39% in 2019 and 2020 to 43% in 2021, the highest it has been in the last seven years,” Lightstone said.
“Most people are moving to the Western Cape, up to 35% in 2021 from 31% in 2020. The numbers were even higher at 36% in 2016 and 2017. For Gauteng, its declining popularity is evident in this data too – whereas in 2015, 29% of semigrants were moving to Gauteng, this had dropped to 27% in 2020 and to 21% in 2021.”
Read: How much it really costs to fix a broken road and potholes in South Africa