Semigration driving economic growth in smaller SA towns

7th March 2023
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Smaller South African towns, known as second-tier cities, have seen exponential growth over the past 3-5 years. Many have realised that not only is it possible to work remotely in outlying nodes in so many industries but these smaller cities also offer other phenomenal opportunities. 

New residents with diverse skills are breathing life into smaller towns 

Most notably, these include more affordable living, and better quality working environments, away from major urban hubs and the challenges that those metros may bring. This the view of Warren Aronson, Business Development Executive from Aucor Property.

Aronson explains, “Semigration is without a doubt the buzz word for many, as people flock to hotspots on the coast and in the Lowveld, including Plettenberg BayKnysnaHermanusUmhlanga and Ballito, to name but a few. However, these are not the only areas that have seen an influx of new families and several locations across LimpopoMpumalanga and even the eastern Cape have gained in popularity, with these metros known as second tier cities.” 

“Property prices across all sectors in these hubs are more affordable and the quality of life is a major draw card for many. Business opportunities are on the rise, and in turn, the growth of commercial and industrial property sectors has surged. Infrastructure, whilst not as sophisticated in these towns compared to major urban centres, is adequate. There is pressure on local governments to upgrade in keeping up with the pace of developments, as well as to drive continued investment into these smaller towns.” 

“Limpopo, with its diverse economy, including mining, agriculture and tourism, has become an attractive investment hub and there has been a marked increase in the development of shopping centres, industrial sites and office parks. This in turn has created job opportunities and helped to boost the economy in the region.” 

“Local government is committed to supporting this process and has devised and implemented a strategy around Special Economic Zones (SEZ’s). SEZ’s seek to promote the beneficiation of minerals, stimulate green energy growth, encourage logistics companies to establish their businesses in the area, and uplift local communities through training and job creation. Ultimately it becomes a win-win situation all round.”

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“Similarly, Mpumalanga cities have seen a flourish of growth and development with the province operating as a major route between Johannesburg and Maputo. Mpumalanga is also rich in minerals and agriculture and offers a plethora of tourism opportunities to local and foreigners alike. Similar programmes and strategies have been implemented including Special Economic Zones and the Mpumalanga International Fresh Produce Market.”

“Property prices, land and rentals in these nodes are more affordable than those in major metropoles, and business confidence is positive when engaging with locals in many of the towns. Several blue chips are well entrenched in these areas and have invested further in custom-built and owned sites. This has freed up quality properties which are prime for smaller operations to step into and start operations without much needing to be done,” concludes Aronson.

Over the past 10 years, Aucor Property has placed dedicated resources into various towns, specifically within Mpumalanga, Limpopo and the Western Cape. This has subsequently allowed the team to develop an in-depth understanding of property values and market demands, as well as to build key relationships with sellers and buyers in these nodes.

The Aucor Property March 2023 auction features more than 40 properties across all asset classes. The line-up includes a blue chip retail centre in Lydenburg with a gross income of ±R7.9 million p.a; several retail sites across Polokwane, pristine industrial space in Middelburg, and a prime retail development opportunity on a main road running through Knysna in the Western Cape. 

Tips for adjusting after semigration

The semigration trend has seen increasing popularity ever since the pandemic made the possibility for remote working more available. The demand for better service delivery has seen the trend continue as many flock to the provinces that they think will offer a better lifestyle.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, explains that while the “work-from-home phenomenon might have pushed people that were sitting on the fence to make the move down to the coast, a continued lack of service delivery is probably what has made this trend continue.”

What you need to consider before moving to another area or city

For those who have decided to make the lifestyle change by moving provinces, Goslett encourages them to do their research first so that they have realistic expectations of what the area can offer. “Average house prices can vary substantially across the country, so buyers might not be able to afford as much as they might have expected. For example, if you move down from Joburg, after having a home in the Northern suburbs, and you come to Cape Town, it is going to be a mental adjustment, because four beds will have to become three or three beds will have to become two, if you’re wanting the same price. And maybe the home will not be in the equivalent of a Bryanston or a Fourways, so buyers will then need to adjust their expectations,” he cautions.

It might also take a while for those who are new to a province to get a good lay of the land. “I would usually recommend renting first before buying a home in a new province. Take the time on weekends to drive through the various suburbs and get a feel for what each neighbourhood has to offer. It is also useful to set up appointments with local RE/MAX agents who can show you what is available within their markets. This will also provide a better idea of the price points within the various suburbs,” Goslett suggests.  

Befriending those who live in the area can also be useful when adjusting to a new province. Locals tend to have the best suggestions for restaurants and stores, so it helps to get plugged into the community as soon as you can. Until then, you could always make use of the ‘near me’ function on Google Maps to find out more about what the area has to offer.

READ: How to adjust to a new home

Another consideration is the climate of the province. “Those who haven’t lived in a province before might be unfamiliar with its microclimates. Certain suburbs might experience heavier rainfall than others, some might catch the wind more often, and others might be a degree or two hotter than the rest of the province. Buyers will also need to orientate themselves to the landscape to figure out if the home is North or South facing; will the home get morning or afternoon sun? These factors all play a role in the overall enjoyment of the property, so it is worth taking the time to figure out,” recommends Goslett.

Although not quite as big of an adjustment as immigrating can be, moving provinces is a big undertaking that will take time to adjust to. Goslett’s final advice to those who are semigrating is to establish a good working relationship with a local real estate professional who can help them better understand the local markets and guide them towards making a sound real estate investment.

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