How higher costs are reshaping Cape Town’s residential property market

If you happened to buy a residential property in Cape Town in 2021 or 2022, you should not be surprised to learn that its growth in value has already hit seven digits. However, it’s not just property values that are rising sharply: municipal bills and rates are following suit and Cape Town homeowners (especially those who bought their properties for more affordable prices in years gone by) are struggling to keep up. 3Cube Property Solutions considers Cape Town’s increasingly contentious rates, their impact on homeownership and their possible contribution to reverse semigration.

A perfect storm of rising valuations versus rising costs

As Cape Town’s property market has surged, so too has the baseline used to calculate how much homeowners owe the city every month. This places significant financial pressure on homeowners, because while the value of their property has increased, their paycheque may not have followed suit. According to Infrastructure News, the average valuation increase for Cape Town residential properties is 17%. However, many households are reporting increases of between 25% and 140%.

The City of Cape Town offers rates rebates and indigent relief as part of its “basket of benefits” – but this is only applicable to a narrow subset of households. Most Cape Town homeowners are simply expected to dig deeper into their pockets. In the case of buy-to-let investors, these added costs are often passed on to tenants, exacerbating the pre-existing problem of eye-watering rental prices in Cape Town.

Fixed charges added to the mix

Daily Maverick points out that over and above soaring municipal bills, Cape Town homeowners must contend with various fixed charges that didn’t exist a decade ago. To establish whether Capetonians’ indignation was righteous, the Daily Maverick asked readers to send in copies of municipal bills from 2015/16 and 2025/26. An analysis of samples received, from a Claremont flat to homes in Woodstock and Constantia, revealed that none of these suburbs have been spared these increases.

Over and above the rates increase, new charges have been introduced, including a city-wide cleaning levy, fixed water and sewerage charges and an electricity home usage charge. However, in response to the Daily Maverick’s assertions, the City of Cape Town has argued that these charges are not new — they are simply being billed differently.

In either case, Cape Town’s homeowners across the board are having to dig deeper into their pockets to pay the various costs associated with homeownership.

Is this contributing to reverse semigration?

For years, Cape Town has been the poster child of semigration, attracting buyers from across South Africa and beyond because of its enviable lifestyle, good governance and reliable service delivery. This demand, coupled with digital nomads, has played a major role in driving property prices upward.

It’s no coincidence that BusinessTech has reported that an increasing number of households are returning to inland provinces like Gauteng. The article cites data from the Absa Homeowners Sentiment Index for the fourth quarter of 2025, revealing that sentiment about buying property increased among inland respondents while remaining unchanged among their coastal counterparts. Tellingly, sentiment around selling property declined in inland areas, while coastal regions recorded an increase.

According to residential property experts, those relocating to Gauteng are citing better job opportunities and lower property prices as primary reasons for leaving the coast. 

The impact on commercial and industrial properties

As 3Cube Property Solutions previously reported, as businesses and workforce activity reconsolidate in Gauteng, the demand for business premises grows. As operating and living costs in Cape Town continue to climb, Gauteng offers a balanced equation between salaries, property costs and logistics, particularly given its role as the country’s economic hub.

Whether your business needs premises in Gauteng or the Western Cape, 3Cube Property Solutions has your needs covered. Get in touch and we’ll share our in-depth knowledge of both markets.