Semigration and the reinvigoration of the property market


By Jacques van Embden, MD at property development firm Blok

 

While Covid-19 dealt South African tourism a sucker punch with international travel obliterated overnight, we’re finally starting to see – while not quite a light – a glimmer of something at the end of the tunnel that points towards recovery. And the city most anticipated to lead this charge? None other than South Africa’s official legislative capital and not-so-official-but-indisputable beauty capital; Cape Town.

 

As a Mother City-based property developer, I admittedly have somewhat of a vested interest in our city’s bounce-back, but there are enough indicators to leave me feeling cautiously optimistic. Cape Town has an incredible value proposition and getting people back won’t require too much convincing.

 

The numbers serve as evidence. According to WESGRO’s research into Western Cape Tourism Recovery, visitors to the participating Western Cape attractions reached 343 727 in December 2020, a 35% recovery rate when compared to December 2019. In terms of flights, passenger arrivals through Cape Town International Airport domestic terminal saw a 51% recovery rate in March 2021, when compared to March 2019. Outdoor attractions such as Koggelberg Nature Reserve were extremely popular, with many having already exceeded 2019 visitor numbers in the November 2020 – March 2021 period.

 

Domestic tourism is on the up, which is encouraging but not surprising – people can no longer travel internationally, and so we’re now grabbing every possible opportunity to get away and see more of our beautiful country – and if there’s a bit of outdoor activity in the mix, then even better.

 

But particularly interesting to me is the changing working paradigm, which is set to catalyse a wave of what has been dubbed ‘semigration’. The protagonist of this trend is the digital nomad, who is essentially an individual who is able to work remotely and travel or live wherever they choose, for as long as they choose.

 

Covid has shown employers that people can work remotely and still get the job done, and many companies are moving towards a hybrid work model, which is anticipated to hang around long after the virus has packed its bags. Employees are happy because they finally have the flexibility they’ve been craving for ages, and employers are happy because they no longer need to shell out for pricey office rentals.

 

Cape Town, which was recently listed in the ‘best cities for remote working’ list by Big 7 Travel, has long been a favourite with digital nomads, “yet this is almost our best kept secret,” said Alderman James Vos, Mayoral Committee member for Economic Opportunities and Asset Management, recently. “Targeting digital nomads as part of our overall destination marketing strategy will become part of the City’s new international campaign when the time is right and when it is safe to do so.”

 

And already we are seeing signs of this intent. The Western Cape provincial government has formally requested the introduction of a ‘remote working’ visa, which will allow international visitors to stay longer and work remotely while travelling in the country.

 

Consider the cards in the city’s favour. Cape Town is already multi-cultural, meaning you are able to find talented staff across the language spectrum. The minimal time difference between South Africa and Europe promotes a healthy and flexible work environment, meaning people can successfully connect with their teams without working late at night or before dawn.

 

For the swallows who chase the summer, we also offer an attractive climate that is counter to the northern hemisphere, making us an ideal destination for the gloomy winter months. And then of course, there is the lifestyle that South Africa – and specifically Cape Town – offers; especially when buoyed by a salary earned in Euros, Pounds or Dollars. The ease of living in the city really makes plugging in so attractive, with the full range of living experiences available on our doorstep.

 

Yet what interests me as a developer is what this all means for the property market.

 

For investors, particularly those buying in Cape Town, this means a highly attractive value proposition. Anecdotal evidence mirrors this: in the first three months of 2021, mortgage originator BetterBond saw a 49% year on year increase in the number of people looking to buy properties in the Western Cape. I expect a full recovery in the short-stay letting market, or the ‘AirBnB economy’, as it has been dubbed.

 

We’re also seeing a more fluid model of property ownership favoured by the nomadic resident. Co-buying will be increasingly attractive, especially among younger buyers seeking a cost-effective timeshare-like arrangement with a friend or family member in another province or country.

 

Those looking to buy want a good investment, but they still want flexibility. Buyers may choose to live in their home some of the time in-between travel, so they want a space that delivers on location, offering them a fantastic lifestyle, but that is also easy for them to lock-up or let-out, as needed.

 

Personal space is less important (who needs a large four-bedroom house when you’re always on the go?) but a functional work set-up is very important, if you are going to be working from home more often than not.

 

Within Cape Town, the Atlantic Seaboard area is anticipated to shine once we enter a period of recovery, and deserves special mention. Surprisingly – or perhaps not so surprisingly, when you consider what the seaside suburb offers – is that there is a 4.5x higher occupancy rate, in the Atlantic Seaboard (versus Cape Town’s Central Business District (CBD), pointing to the desirability of the high-rise apartment living suburb.

 

Last but not least, is the reemergence of community. After a period of being apart, we want to come together, and a location that offers a sense of community and connectedness is key. With the promenade on its doorstep and easy access to lifestyle centres, eateries and fitness centres, the Atlantic Seaboard delivers on this.

 

These factors informed our new Sea Point-based development, ONE26 ON M, which will be built over the next two years and which offers the remote worker a perennially attractive investment and lifestyle destination. We’ve designed each home so that there’s a workspace as part and parcel, while the apartment block offers communal features such as shared meeting rooms and a roof deck with pool, which facilitates social connection. We’ve been really purposeful in what we have designed, building our product around the buyer of the future.