Cape Town’s rising property costs are prompting Johannesburg homeowners to rethink the traditional approach to semigration. Rather than selling up before moving south, some are holding onto their Gauteng properties and renting them out to generate income.
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With rental demand strengthening in parts of Johannesburg and property prices lagging behind the Western Cape, the strategy offers a potential way to offset Cape Town’s higher living costs. But with vacancies, maintenance and management fees eating into returns, does keeping a foot in both markets make financial sense?
Grant Smee, chief executive officer of Only Realty Group believes that the semigration story is shifting again. “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,” he says.
He adds, “Selling your Johannesburg home was once the natural first step when relocating to the Cape, but that calculation has changed. If you own a good property but the current market isn’t giving you the price you want, renting it out allows you to generate income while waiting for conditions to improve.”
Why sell if the numbers say wait?
The divergence between Gauteng and Western Cape property performance helps explain the strategy.
“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.
Recent Rode Report data puts average yields on A-grade apartment blocks at approximately 8.1% in Johannesburg compared with 7.3% in Cape Town.
Demand for larger family rentals is also being supported by constrained stock. Financial Mail reported that across nine sought-after Johannesburg suburbs, the number of houses advertised for sale fell from 127 in December 2025 to 68 by July 2026.
Yet prices have not responded as basic supply-and-demand economics might suggest. Stats SA data showed Johannesburg house prices rising by around 4% year-on-year in early 2026, while Cape Town continued to record substantially stronger growth.
“There’s a disconnect that some Johannesburg homeowners are choosing to ride out,” says Smee. “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. Holding onto the property allows you to earn rental income today while retaining exposure to a future recovery in the Johannesburg market.”
Turning the family home into an income-producing asset: For semigrants, the Johannesburg family home can therefore shift from being an obstacle to relocation into an asset that helps finance it.
“That income becomes particularly valuable given the cost of renting in Cape Town. In the CBD, for instance, the average monthly rental for a two-bedroom apartment is approaching R33,500 –- roughly double what it cost six years ago. Family homes in the City Bowl, Southern Suburbs and Atlantic Seaboard can command considerably more.”
Smee goes on to say that, for households with a Johannesburg property that is paid off or has a relatively low home loan, the rental income can effectively subsidise the premium they’re paying to live in Cape Town. ‘You may be living 1,400km away, but your Johannesburg home can still help fund your new lifestyle.
Rental income is not free money
Smee cautions, however, that homeowners should not make the decision based on headline rental figures alone. “The rent you charge and the return you actually pocket are two very different numbers.”
Letting and management fees, municipal rates, levies, insurance, repairs and maintenance all reduce returns, while owners also need to budget for vacancies and unexpected expenses. Managing a property from another province adds further complexity, making a reliable agent or property manager particularly important.
“Owners need to calculate the actual net income the property is likely to generate, rather than assuming the advertised rental will be available to fund their Cape Town costs,” says Smee. “The strategy can become uncomfortable very quickly if you’re paying a substantial Cape Town rental while servicing a Johannesburg bond and the property sits vacant for two or three months.”
The numbers need to make sense
Before deciding to hold onto a Johannesburg property, Smee recommends comparing the strategy with the alternative: selling, releasing the equity and using that capital to reduce Cape Town housing costs.
The calculation should consider the outstanding bond, realistic achievable rental, operating costs, potential vacancies, equity tied up in the property and the owner’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.”
Smee says the evolution of semigration is changing the relationship homeowners have with property across South Africa’s major cities.
“Moving cities no longer necessarily means selling in one market to participate in another,” he says. “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.”
