Can Johannesburg Reverse Urban Decline As City Pushes CBD Renewal And Investment Strategy

On the other hand, persistent infrastructure failures, rising municipal debt, deteriorating public spaces, and the spread of illegally occupied buildings have placed the city under growing scrutiny.

For property investors and developers, the question is no longer whether Johannesburg faces serious challenges. Instead, it is whether the municipality can stabilise the situation and reverse years of decline in the inner city.

The City of Johannesburg believes it can. Through enforcement, incentives, public-private partnerships and infrastructure investment, the municipality is attempting to revive the CBD and surrounding precincts. Whether these initiatives succeed will determine not only the future of the city centre, but potentially the direction of property investment in South Africa’s largest metro, once dubbed the City of Gold.

A city under pressure: Debt, infrastructure failures, and urban decay

Over the past decade, the condition of Johannesburg’s deteriorating infrastructure and lack of municipal management has become increasingly difficult to ignore. These challenges have contributed to a steady outflow of residents semigrating to other provinces in search of better services and opportunities.

Infrastructure failures

Infrastructure failures are most visible in the electricity and water systems. Ageing infrastructure and years of underinvestment have created major maintenance backlogs. Johannesburg Water has warned the city faces a water infrastructure renewal backlog of more than R27bn, with large parts of the network exceeding their designed lifespan. The result is frequent pipe bursts, water disruptions, and significant losses through leaks and illegal connections.

Electricity supply has also become increasingly unstable. The city’s power utility, City Power, estimates that electricity theft and illegal connections cost it around R2bn annually, severely undermining its ability to maintain and upgrade the network.

Municipal finances and debt

Debt and weak revenue collection add further pressure. In its 2025 budget process, the City of Johannesburg acknowledged that declining payment rates and rising operational costs continue to strain municipal finances. The metro tabled a R89.4bn budget for the 2025/26 financial year, including R8.7bn in capital spending for infrastructure renewal.

Urban decay and the inner city

Johannesburg’s financial and infrastructure challenges are most visible in the inner city. Large parts of the CBD and surrounding neighbourhoods have experienced years of urban decay. Illegal occupation, informal rentals and deteriorating municipal services have transformed once-prominent buildings into unsafe residential spaces. Provincial authorities estimate that hundreds of “hijacked” buildings exist in the inner city, many without safe electricity or water connections.

Crime and perceptions of insecurity have compounded the problem. Cultural venues and businesses that once helped revitalise areas such as Maboneng have struggled amid safety concerns and declining urban management. The result has been a gradual hollowing out of the city centre. Businesses and residents have shifted north to areas such as Sandton, Rosebank and Fourways, leaving large parts of the CBD economically weakened.

Semigration and why Johannesburg still matters

Despite these challenges, Johannesburg remains one of Africa’s most strategically important property markets. For investors, another factor remains compelling: relative affordability. Compared with many global cities — including Cape Town — Johannesburg property still offers accessible entry points and redevelopment opportunities. In comparison to Cape Town’s property prices surging by more than 25% over the last five years, Johannesburg saw a moderate increase of only 12%. Alongside private-sector investment in precincts such as Sandton, Rosebank and Waterfall City, the city continues to hold long-term potential as both a commercial and residential market.

The question now is whether municipal reforms can unlock that potential again.

Recent data from JHB Removals, one of Johannesburg’s most trusted moving companies, suggests that it can. An increasing number of residents who semigrated three to four years ago are now relocating from Cape Town back to Johannesburg, mainly due to the rising cost of housing. Some analysts believe this trend could accelerate if the city experiences political change.

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The City’s turnaround plan: Infrastructure, partnerships, and urban management

Faced with mounting pressure, Johannesburg’s recovery strategy combines infrastructure investment, regulatory enforcement, institutional reform and private-sector collaboration. The main initiatives include:

Inner-City Revitalisation Programme

At the centre of the strategy is the Inner-City Revitalisation Programme, which focuses on restoring urban management, upgrading infrastructure and returning abandoned buildings to productive use.

A key component involves rehabilitating derelict or unsafe buildings. Rather than relying solely on enforcement, the city is using incentives and partnerships to unlock property value in the CBD. The Johannesburg Developmental Agency (JDA) has been tasked with implementing targeted urban upgrades, improving the built environment and coordinating infrastructure investment in key precincts.

According to Themba Mathibe, CEO of the JDA:

“The inner city remains a critical economic node for Johannesburg. Our work focuses on upgrading public infrastructure and creating the conditions that allow private investment and residential growth to return to the CBD.”

Private sector partnerships and key players

Several private-sector players are already involved in inner-city redevelopment. These include Divercity Property Fund, City Property, Afhco Holdings, and financing partners such as TUHF (The Urban Housing Fund), which specialises in funding inner-city residential conversions.

Divercity, backed by investors including Atterbury Property and Ninety One, has invested more than R3bn in redevelopment projects across Jewel City, Marshalltown and Maboneng, converting derelict buildings into mixed-income housing. The Jewel City precinct, developed by Divercity Property Fund, is often cited as a flagship regeneration project. The redevelopment involved roughly R2bn in investment, transforming abandoned industrial buildings into a mixed-use neighbourhood with more than 1,500 residential units, retail space and upgraded public spaces.

Partnership models are already visible in precincts such as Braamfontein, Maboneng, Marshalltown and Jeppestown, where coordinated investment has improved public spaces, buildings and security. Johannesburg Executive Mayor Dada Morero has emphasised the importance of collaboration:

“The revitalisation of the inner city will not be achieved by government alone. It requires a partnership between the city, the private sector and communities to rebuild confidence and restore Johannesburg as the economic heart of South Africa.”

Business-led initiatives have also begun supporting urban renewal. Jozi My Jozi, a coalition backed by companies including Standard Bank, Anglo American, Nando’s, Wits University and Altron, has funded clean-up campaigns, homelessness interventions and the installation of more than 600 solar-powered streetlights across parts of the inner city.

Enforcement and revenue reform

Alongside redevelopment initiatives, the municipality has intensified enforcement efforts. High-impact service delivery operations target illegal dumping, hijacked buildings and infrastructure vandalism across Region F, which includes the CBD and surrounding neighbourhoods. These operations involve meter audits, by-law enforcement raids and the disconnection of illegal electricity and water connections. Several buildings with millions of rand in municipal debt have reportedly been disconnected in an effort to improve revenue collection.

The city is also attempting administrative reforms. As part of the 2025 budget cycle, the municipality said it is working to improve billing accuracy, strengthen credit-control systems and modernise revenue collection processes.

What investors should watch: Signs of a potential recovery

Despite ongoing risks, several indicators suggest the city’s turnaround strategy could create new opportunities for property investors.

Residential and mixed-use development

Recent residential developments suggest some investors remain confident in the city’s urban property market. Developers are also converting older commercial buildings into housing. The Greatermans Building redevelopment on Commissioner Street is one example, creating affordable rental accommodation close to employment hubs. Meanwhile, larger mixed-use projects such as the R3bn Barlow Park development near Sandton show that demand for well-located residential housing remains strong across Johannesburg’s economic nodes.

Precinct-based regeneration

The inner city still contains a large stock of structurally sound but underused buildings. As the municipality rehabilitates unsafe properties and releases others for redevelopment, investors could gain access to well-located assets at relatively low entry prices.

Precinct-based regeneration also presents an opportunity. Concentrated investment in specific districts can trigger wider urban recovery. Areas such as Maboneng, Newtown, Jeppestown and Marshalltown have already demonstrated how coordinated redevelopment can transform urban districts.

Transport-oriented development

Transport-linked development may also shape Johannesburg’s property future. Long-term plans for transit-oriented corridors linked to the Gautrain and Rea Vaya bus network, including the Empire-Perth and Louis Botha corridors, aim to connect residential areas with economic hubs.

If implemented effectively, these initiatives could reshape how people live and work in the city while unlocking new development nodes.

A city worth watching

Johannesburg remains South Africa’s economic powerhouse, but it is also navigating a difficult transition. Years of infrastructure neglect, financial strain and governance instability have taken their toll on the urban core. Ultimately, investors will be watching how effectively the municipality manages its public-private partnerships. If these collaborations deliver visible improvements in infrastructure, safety and service reliability, confidence in the Johannesburg property market could recover.

For property investors with a long-term outlook, Johannesburg may once again become a city of opportunity. The coming years will reveal whether the City of Gold can put real muscle behind its strategy and reclaim some of its shine.