The rapid expansion of Airbnb in Cape Town is sparking concerns about its potential to drive up property prices, which could make housing less affordable for local residents, Cape {town} Etc reports, Cape {town} Etc reports.
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As Cape Town gains popularity as a global tourist destination, many property owners are turning to short-term rentals through platforms like Airbnb, increasing both demand and prices.
This trend mirrors the challenges seen in cities like Barcelona, where Airbnb’s growth has been associated with rising property prices, gentrification, and the displacement of long-term residents. In 2024, Cape Town has already experienced a significant increase in foreign visitors, with tourism numbers rebounding strongly after the pandemic. This recovery has fueled growth in the short-term rental market, particularly in areas like the City Bowl and Atlantic Seaboard, where Airbnb listings have increased by 190% since 2022.
The average property price in Cape Town now exceeds R2.23 million, up from R1.63 million in 2014 — a rise of over 36%. However, this surge in popularity among tourists has a downside. The shift from long-term rentals to short-term Airbnb listings is reducing the housing supply available to locals and pushing up both rental and property prices. For instance, in Cape Town’s city centre, the rental yields from short-term leases are significantly higher than those from long-term rentals, motivating landlords to list on Airbnb instead of offering housing to permanent residents. This reduces the available housing stock, driving prices beyond the reach of many local families.
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A key concern is that this trend could further exacerbate the already steep inflation in property prices across the city. Data from over 190 000 property sales registered with the deeds office in 2024 already indicate troubling trends. The national average price for a home in South Africa currently stands at R972 200. However, the average home price in the Western Cape (WC) is over R1.6 million, nearly double the national average. The only other province where the average property price exceeds R1 million is KwaZulu-Natal, but it trails far behind the WC at R1.05 million.
‘We have a huge housing shortage in South Africa – pair that with affordability issues, and one has to question the sustainability of this residential rental model in South Africa,’ said commercial property broker Ash Müller.
The Sunday Times reported that the surge in Airbnb listings in Cape Town is attracting criticism from residents who feel they are being priced out of their own city. Data from Inside Airbnb, a collaborative project that tracks Airbnb’s global growth, shows there are 23 564 active listings in Cape Town. Of these, 19 280 (81.8%) are entire home/apartment listings, 4 062 (17.2%) are private rooms, 79 (0.3%) are shared rooms, and 143 (0.6%) are hotel rooms. These numbers already exceed the Airbnb listings in many popular tourist destinations, including San Francisco (7 888), Amsterdam (9 310), Athens (13 274), Berlin (13 759), Sydney (15 548), Tokyo (16 518), and Barcelona (18 925).
As more property owners in Cape Town turn to Airbnb, the city risks facing similar challenges to those seen in Barcelona, where the unregulated growth of short-term rentals has worsened housing shortages. The negative social impacts are also becoming more visible. Gentrification in sought-after neighborhoods such as Sea Point, Green Point, and De Waterkant has forced long-term residents to relocate as landlords prioritise short-term rental profits.
In response to these issues, Barcelona’s local government has introduced strict regulations, including a ban on new short-term rental licenses and hefty fines for illegal listings, to protect housing affordability.
However, Airbnb contends that its services provide more benefits than risks. The company notes that its listings represent less than 3% of the total housing stock in Cape Town, and the average host rents out their home for just 38 nights per year. Additionally, an Airbnb survey of over 1 800 South African hosts and guests showed that 50% of respondents were struggling with the rising cost of living, and more than one-third needed extra income to make ends meet.
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