Cape Town may be South Africa’s tourism crown jewel, but a growing number of residential communities are raising concerns about the unintended consequences of short-term rental platforms like Airbnb. As the Department of Tourism finalises new national regulations for short-term letting, the city could soon join a global wave of destinations — including Amsterdam, New York, and Barcelona — tightening rules on Airbnb activity.
The proposed regulations aim to bring short-term rentals in line with the broader tourism sector, requiring hosts to register their properties, adhere to health and safety standards, and potentially face limits on how many days a year they can let their homes. These steps could significantly affect both buy-to-let investment behaviour and the availability of long-term rentals in cities like Cape Town.
Sectional Title Schemes Caught in the Middle
One of the sectors likely to benefit from the new rules is South Africa’s many sectional title (ST) schemes. In Cape Town, Durban, and Johannesburg, entire apartment complexes have seen a high turnover of short-term guests, with some units functioning almost exclusively as Airbnb properties. This has led to concerns about security, wear and tear on shared facilities, and declining community standards.
Andrew Schaefer, Managing Director of property management firm Trafalgar, notes that trustees have often struggled to implement rules restricting short-term letting, while current legislation allows for conduct rule changes by special resolution.
New regulations could change that equation. If operating short-term rentals becomes less profitable or more burdensome, more owners may opt for long-term letting or choose to sell — potentially tipping voting power back to residents concerned with stability and quality of life.
Cape Town’s Rental Market Feeling the Squeeze
Cape Town’s rental market is undeniably under pressure. In high-demand neighborhoods like the CBD and Atlantic Seaboard, long-term rental stock is scarce and increasingly expensive. While Airbnb listings make up less than 1% of formal housing citywide, their dominance in tourist-heavy areas is a real factor in squeezing out affordable, long-term options. In Central Cape Town, for instance, there were just 700 long-term rental listings available at the start of the year — dwarfed by over 23,000 Airbnb units.
Airbnb Counters With Economic Data
However, Airbnb presents a different perspective in its 2023 report. The company highlights that only 0.9% of Cape Town’s formal housing stock consists of dedicated Airbnb rentals—entire homes let for more than 90 nights a year. It argues that even if all these units were shifted to long-term rentals, average rents would decline by only R69 per month, and notes that the number of listings hasn’t grown significantly since 2020.
Still, critics argue that this citywide average masks the impact in hotspot areas. Where Airbnb listings cluster, local residents face more competition for rental stock, and landlords have a financial incentive to cater to tourists rather than long-term tenants.
A Need for Balanced Policy
The question facing Cape Town is not whether short-term letting should be regulated, but how. But unchecked growth in short-term rentals could further strain housing affordability and community cohesion.
As South Africa moves forward with policy reforms, the challenge will be creating rules that are fair, transparent, and locally adaptable — ensuring that tourism continues to thrive without displacing the people who call the city home.
