Gauteng’s service-delivery crisis tests its appeal as Cape Town prices rise

Gauteng, South Africa's most populous province, faces a service-delivery crisis that is testing its appeal as property prices rise in Cape Town. The 2021-2026 period saw Gauteng experience the largest interprovincial migration, with approximately 1.42 million people moving there compared to 500,093 for the Western Cape. However, the mismanagement of Gauteng's municipalities, including Johannesburg, and poor service delivery have negatively impacted its attractiveness to property buyers and investors.

Renier Kriek, managing director of Sentinel Homes, highlights that Johannesburg's unpaid customer bills have reached nearly R72 billion, creating a cycle where unreliable services deter customers from paying, weakening revenue for maintenance and investment.

Cape Town, on the other hand, has attracted a significant number of new residents due to its superior service delivery. However, the city's reluctance to release land quickly and fast-track development approvals has led to a housing shortage, resulting in skyrocketing property prices. Lightstone, a property data firm, found that the Western Cape recorded a net gain of seller-buyers over the past five years, with Gauteng losing the least since 2021.

This shift can be attributed to rising prices and affordability pressures in Cape Town, declining remote work opportunities, and relatively attractive property values in Gauteng.

Kriek argues that credible improvements in Gauteng could influence households to reconsider their decision to move to Cape Town. He emphasizes that election winners will face challenges in implementing changes and that public sentiment on the lack of progress can drive property prices and investments. Property investors and homebuyers respond to poor municipal conditions by forming lower-priced sale transactions or seeking alternative investments.

A badly run municipality can make a house cheaper to buy initially but more expensive to live in over time, as households may need to fund additional expenses like water storage, backup power, and security.

The country's undersupply of public infrastructure, particularly public transport, exacerbates the affordability crisis. As urban nodes become denser, reliance on private vehicles and minibus taxis becomes increasingly irrational. South Africa is experiencing a phase of coalition politics, which could bring better balance and diverse leadership to municipalities.

However, practical evidence of infrastructure improvements, reliable services, quicker development approvals, and accelerated affordable housing initiatives is needed to hold new leaders accountable for their performance.