The Joburg home paying for a Cape Town lifestyle

South Africa’s semigration trend is evolving as Johannesburg homeowners increasingly consider renting out their properties rather than selling, using rental income to help fund a new life in Cape Town.

• A new semigration strategy: Some Gauteng homeowners are retaining their Johannesburg properties and renting in Cape Town instead of selling.
• The rental advantage: Rode Report figures indicate yields of 8.1% in Johannesburg versus 7.3% in Cape Town for A-grade apartment blocks.
• The affordability challenge: Cape Town CBD two-bedroom rentals are approaching R33,500 monthly, making Johannesburg rental income a potential financial lifeline.

South Africa’s semigration story is entering a new chapter. For years, the movement of homeowners from Gauteng to the Western Cape has helped reshape Cape Town’s residential property market, driven by lifestyle preferences, remote working, schools, security and access to amenities.

While international buyers and digital nomads have attracted considerable attention, domestic semigration remains an important driver of demand.

Now, a different property investment strategy is emerging: instead of selling their Johannesburg homes to finance a move to Cape Town, some homeowners are retaining those properties as rental investments.

According to Grant Smee, CEO of Only Realty Group, the shift reflects changing property market conditions and a growing appreciation of the income potential of existing residential assets.

“A growing number of Johannesburg homeowners who can afford to do so are choosing not to sell when they move south. Instead, they are renting out their Joburg homes while renting in Cape Town,” says Smee.

For households with sufficient financial flexibility, this approach offers an alternative to selling in a market where prices may not meet their expectations.

Semigration: Why the Trend Is Changing

Semigration accelerated during the pandemic as remote working gave households greater freedom to relocate without changing employers.

Although working arrangements have evolved, the appeal of the Western Cape has continued, particularly among families and professionals seeking lifestyle benefits. Traditionally, homeowners moving from Johannesburg to Cape Town would sell their existing properties and use the proceeds towards purchasing another home.

But the divergence between the two cities’ property markets is encouraging some to reconsider. Johannesburg has experienced comparatively modest house price growth, while Cape Town has recorded stronger appreciation and higher housing costs.

This creates a difficult choice: sell a Johannesburg property at a price below expectations, or retain it and earn rental income while living elsewhere.

Why sell if the numbers say wait?

For homeowners who are not under pressure to sell, holding onto an existing property may provide two potential benefits: immediate rental income and continued exposure to future capital appreciation.

“Gauteng has experienced relatively modest house price growth compared with the Western Cape. For owners of substantial family homes in established Johannesburg suburbs, selling now can mean accepting a price well below expectations. At the same time, the rental market has strengthened,” says Smee.

Several market indicators illustrate the different dynamics.

Johannesburg vs Cape Town: The Numbers

Sources cited in the supplied commentary: Rode Report, Statistics South Africa and Financial Mail. The apartment yields are market benchmarks, not projected returns for individual family homes.

The reduction in advertised properties across the selected Johannesburg suburbs suggests tighter available stock, although this has not necessarily translated into substantial price increases.

Smee believes some owners are prepared to wait rather than accept offers below their expectations. “If rental demand is healthy and you don’t need to sell immediately, accepting a disappointing offer simply because you’re moving cities may not make financial sense.”

He adds: “Holding onto the property allows you to earn rental income today while retaining exposure to a future recovery in the Johannesburg market.”

Of course, a future recovery is not guaranteed. Investors must consider whether the rental income justifies retaining the capital tied up in the property.

Turning the family home into an income-producing asset

For some semigrants, the Johannesburg family home is becoming more than an asset they leave behind. It can help finance their new lifestyle.

Rather than selling and immediately committing to Cape Town’s higher purchase prices, homeowners can rent in the Western Cape while generating income from their Gauteng property. This strategy may be particularly attractive to owners with little or no outstanding mortgage debt.

The rental income can contribute towards accommodation costs in Cape Town, where prices have risen substantially in desirable locations. According to the market commentary, the average monthly rental for a two-bedroom apartment in Cape Town’s CBD is approaching R33,500, roughly double the level recorded six years ago.

Larger family homes in the City Bowl, Southern Suburbs and Atlantic Seaboard can command considerably more. “You may be living 1,400 kilometres away, but your Johannesburg home can still help fund your new lifestyle,” says Smee.

However, the financial benefit depends on the rental achieved, ownership costs and the household’s Cape Town accommodation expenses.

Rental income is not free money

The biggest mistake homeowners can make is assuming that the rent collected from their Johannesburg property is entirely available to spend. “The rent you charge and the return you actually pocket are two very different numbers,” warns Smee.

Landlords must account for:

• Letting and property management fees.
• Municipal rates, levies and insurance.
• Maintenance, repairs and unexpected expenses.
• Vacancies, rental arrears and outstanding bond repayments.

Managing a property from another province introduces additional practical challenges, making reliable local management particularly important.

A two-month vacancy could leave a household paying Cape Town rent while still carrying all the ownership expenses of its Johannesburg property.

The numbers need to make sense

Before deciding whether to sell or retain a Johannesburg home, Smee recommends comparing both options financially.

• Option 1: Sell the Johannesburg property
  Release the equity, settle outstanding debt and consider using the proceeds to reduce the cost of buying or renting in Cape Town.
• Option 2: Retain the property and rent it out.
  Calculate the achievable rental, subtract all operating expenses and financing costs, and assess the remaining cash flow against the capital retained in the property.

The decision should also account for potential vacancies, future maintenance, property price movements and the household’s longer-term plans. “Property decisions of this scale should be driven by the numbers, not emotion,” says Smee.

“Don’t hold onto a property purely because you believe it’s ‘worth’ more than buyers are prepared to pay. Equally, don’t sell a good asset simply because conventional wisdom says moving cities means making a clean break.”

The Bottom Line: Two cities, one property strategy

Semigration is no longer necessarily a straightforward process of selling in one city and buying in another. For financially secure homeowners, retaining a Johannesburg property while renting in Cape Town can offer flexibility, rental income and continued exposure to the Gauteng property market. But it also creates financial commitments in two cities.

The smartest decision is not automatically to sell or to hold. It is the option that delivers the strongest sustainable financial outcome.

As Smee concludes: “For some Johannesburg homeowners, the smarter move may be to let one city help pay for the other; the numbers still have to stack up, but selling is no longer the obvious next step.”

Source: Only Realty Group, with commentary from CEO Grant Smee and market figures attributed to Rode Report, Statistics South Africa and Financial Mail.