Commentary on the Changing Trends in South Africa’s Residential Market

As CEO of the Southern African Housing and Residential Alliance (SAHARA) and Chair of the Reside Summit, I have had the privilege of witnessing the evolving dynamics of the residential investment and development landscape across South Africa. The latest insights into the migration patterns and housing market trends, particularly in the Western Cape and beyond, highlight a significant shift in how South Africans are making residential investment decisions.

The notion that Cape Town’s once-thriving semigration wave is slowing due to affordability constraints, congestion, and infrastructure limitations aligns with broader market trends we have observed in our industry engagements. The rise of small-town living, particularly in the Garden Route, Overberg, and West Coast, speaks to a growing desire for quality of life, improved affordability, and access to well-managed infrastructure—factors that increasingly dictate residential investment decisions.

This movement signifies a deeper structural shift in South Africa’s housing sector. The demand for coastal and inland secondary markets is not merely a reaction to Cape Town’s pricing surge but a testament to evolving lifestyle and work preferences. The post-pandemic acceleration of remote work has empowered homeowners to seek alternatives outside traditional urban centers, where cost efficiency meets enhanced livability. In addition, the influx of younger, primary-home buyers and entrepreneurs into these areas is a clear indication that economic opportunity is following this migration pattern, spurring local investment and development.

While the appeal of smaller towns is on the rise, the success of these emerging residential hubs hinges on the strength of municipal governance and infrastructure development. Property value growth in towns such as George, Hermanus, and St Francis Bay underscores the importance of well-run municipalities in sustaining long-term investment. Conversely, the stagnation seen in once-thriving towns like Margate and Parys serves as a cautionary tale about the impact of deteriorating infrastructure and service delivery.

At SAHARA and the Reside Summit, we are committed to fostering industry-wide collaboration to ensure that housing development remains sustainable and inclusive. The decentralization of housing demand presents an opportunity to innovate, embracing new models of urban development that prioritize resilience, affordability, and community well-being. It also reinforces the urgent need for integrated public-private initiatives to support infrastructure, transport, and service delivery in high-demand nodes.

Ultimately, the South African housing market’s transformation reflects both challenges and opportunities. As we move forward, it is critical that developers, financiers, and policymakers work together to harness this momentum, ensuring that both urban and emerging small-town markets are equipped to meet the diverse housing needs of our population. The shift towards smaller towns is not just a trend—it is a signal of changing economic and social realities that require strategic response and long-term planning.