Stormers vs The Lions

Stormers vs. Lions – except we’re talking lifestyles and economics

The COVID-19 pandemic acted as a catalyst, accelerating the adoption of remote work (WFH) and reshaping South Africa’s economic landscape. While Gauteng has long been the nation’s economic powerhouse, the Western Cape – particularly Cape Town – has emerged as a formidable competitor.  This shift is not only evident in economic output but also in tax contributions and the migration patterns of high-net-worth individuals (HNWI’s).

Economic Contributions: Gauteng vs. Western Cape

Using 2023 data – as there’s little more accurate data from recent years – Gauteng accounted for approximately one-third of South Africa’s GDP, cementing its status as the country’s financial and industrial hub .  The province’s economic strength is bolstered by its dominance in finance, real estate, and business services, which collectively contribute around 27% to its GDP.

Conversely, the Western Cape contributed nearly 15% to the national GDP, with Cape Town representing 73% of this regional share.  The Western Province’s economic pillars include financial services, business, and real estate services, which constitute a third of its GDP contribution, followed by manufacturing (14%) and tourism-related industries (13%).

Despite Gauteng’s larger overall economic footprint, the Western Cape’s GDP per capita surpasses the national average, and its 20% approximate unemployment rate is significantly lower than the national average of 32%.

Tax contributions: Gauteng’s dominance

The South African Revenue Service’s (SARS’s) data for the 2022/23 financial year reveals that Gauteng contributed 58% of the country’s total tax revenue, amounting to R1.69 trillion.  KwaZulu-Natal followed with 18%, and the Western Cape contributed over 15%.  This confirms Gauteng’s role as the primary tax contributor, reflecting its concentration of economic activities and high-income earners.  However, the Western Cape’s share indicates a growing economic base and an increasing ability to generate tax revenue.

Wealth migration: The rise of the Western Cape

The Africa Wealth Report 2025 highlights a significant demographic shift: the Western Cape now hosts more millionaires than Gauteng.  Approximately 17 300 millionaires reside in the Western Cape, encompassing Cape Town, the Winelands, Whale Coast, and Garden Route, compared to 14 000 in Johannesburg and Pretoria.

This trend is attributed to several factors:

Remote work opportunities:  The pandemic-induced shift to remote work has allowed professionals to relocate without compromising their careers.

Lifestyle appeal:  The Western Cape offers a high quality of life, with scenic landscapes, a temperate climate, and a vibrant cultural scene.

Infrastructure development:  Significant investments in public transport, water provision, and sewage systems have improved the province’s quality of life.  Consequently, areas like Stellenbosch, Paarl, and Franschhoek have become magnets for retirees and affluent second-home buyers.

Property market dynamics

The influx of those with money into the Western Cape has had a profound impact on the property market. For instance, property prices on Cape Town’s Atlantic Seaboard have surged by over 160% since 2010.  In May 2025, suburbs like Tokai reported average house selling prices of R7.21 million.

In contrast, Gauteng’s luxury property market has experienced stagnation.  Prime property prices in Central Sandton have remained steady at around R32 000 per square meter, while Cape Town’s luxury properties have reached R102 000 per square meter.

This disparity reflects the shifting preferences of affluent individuals, who increasingly prioritise lifestyle and environmental factors over traditional business-centric locales.

Tax incentives and remote work Visa

South Africa’s introduction of the Remote Work Visa has further bolstered the Western Cape’s appeal.  This 36-month visa allows foreign nationals to live and work remotely from South Africa, provided they meet certain income thresholds and health insurance requirements.  Cape Town, with its high quality of life and established infrastructure, has become a preferred destination for these remote workers.  The influx of international professionals contributes to local tax revenues through personal income and consumption taxes, further enhancing the province’s economic standing.

This comparative analysis underscores the Western Cape’s emerging prominence in South Africa’s economic landscape, driven by its appeal to high-net-worth individuals and the resultant economic activities.

The post-pandemic era has witnessed a significant shift in South Africa’s economic dynamics.  While Gauteng continues to be a central economic hub, the Western Cape’s rise – both in terms of economic output and tax contributions – signals a diversification of the nation’s economic base.  Factors such as remote work opportunities, lifestyle preferences, and targeted infrastructure investments have positioned the Western Cape as a formidable economic player.