Kannaland Municipality Property buyers are no longer just looking for a view; they are looking for functional infrastructure, efficient service delivery, financial sustainability, educational opportunities and, increasingly, career longevity.
Image: Ayanda Ndamane/ Independent Media
Municipal collapse tends to spell a death knell for real estate.
However, Knysna is currently providing a counterintuitive case study in market resilience, says Gerhard Kotze, CEO and franchisor at RealNet Properties SA.
He says they are seeing a boom in a town plagued by chronic infrastructure hurdles.
“It suggests that for high-net-worth buyers, natural scarcity has become an unpriceable asset that carries more weight than governance. We are seeing a decoupling of property values from municipal efficiency. When I looked into the mechanics of this, a few things became clear.”
The CEO says that firstly, this growth is driven by higher-end estates and managed precincts that essentially operate as private islands. He says that through boreholes, off-grid sewage package plants like BIOROCK, and solar arrays, these pockets have stepped in where the state has stepped out.
He adds that next, Knysna was never built to support its current population-a challenge it shares with Cape Town.
The infrastructure is being asked to sustain a load it was not engineered for, which is why they have seen the province step in with administration.
“Lastly, it's important to note that Knysna and George are separate municipalities. While they share a district, Knysna's infrastructure can, and has, deteriorated independently of its neighbours.”
According to RealNet Properties SA, this raises a curious question for investors: Is a town's lifestyle allure a better long-term bet than its municipal efficiency?
The real estate agency says residents are currently bypassing failure through private self-reliance, but there is always a limit to how long a town can ignore the plumbing
“If the private sector continues to bridge the gap, Knysna might just prove that lifestyle is the ultimate hedge against decay, but only for those who can afford to build their own grid.”
In March, BetterHome Group Mortgage Origination and BetterBond said South Africa’s semigration wave is entering a new phase.
It said that homebuyers and investors are making more strategic relocation decisions, focusing on more than just lifestyle needs.
“The initial pandemic-driven ‘lifestyle’ rush to the coast has been replaced by a more strategic, service-driven model,” said Stephan Potgieter, CEO of BetterHome Group Mortgage Origination and BetterBond.
“Buyers are no longer just looking for a view, they are looking for functional infrastructure, efficient service delivery, financial sustainability, educational opportunities and increasingly, career longevity.”
He added that the shift reflects a maturing property market in which semigration decisions are increasingly influenced by municipal performance, economic opportunities and long-term investment value.
Recently, the Minister of Cooperative Governance and Traditional Affairs, Velenkosini Hlabisa, reaffirmed the government's commitment to fixing dysfunctional municipalities as a critical step towards unlocking economic growth, attracting investment and creating sustainable employment.
Addressing the Business Leadership South Africa Council, the Minister emphasised the urgent need to professionalise local government, strengthen governance systems, and build capable, ethical leadership across municipalities.
He noted that functional municipalities are foundational to infrastructure delivery, investor confidence and inclusive economic growth.
The Minister invited the private sector to actively enrich the White Paper on Local Government Review when it is gazetted later this month.
He described the review as anchored on key priorities: building capable and developmental municipalities, advancing ethical leadership, strengthening governance, and deepening community engagement.
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