Property in Cape Town has become unaffordable for ordinary Capetonians.
Within a 10km radius of the city centre, you would struggle to buy a one-bedroom home for under R2 million. You’d be hard-pressed to rent a one-bedroom flat for under R15000 a month too.
It’s even more unaffordable for families.
But it’s not just poor and working-class people who are being priced out of the property market. Middle-income professionals are forced to look outside the city – on the Cape Flats, Northern Suburbs, and up the West Coast – for affordable lodging.
Driving up the sale and rental prices are: foreign professionals looking for a scenic location to work remotely; returning South Africans with pockets full of pounds and euros; and property investors looking to add to their Airbnb rental stocks.
And the downside of the Western Cape being the best-run province – more and more wealthy South Africans from upcountry are looking to “semigrate”, lay roots or retire in the Fairest Cape, where service delivery such as water and sanitation, electricity and refuse collection are more reliable.
It’s bad news for the average first-time home-buyer in the Mother City who’s earning in rands.
And it places additional pressure on home-owners who are struggling to afford their bond instalments as rising interest rates take their toll.
The problem is likely to get worse too. A new proposed “SA Digital Nomad Visa”, if passed, would allow remote workers to live and work in South Africa for a maximum period of three years while being employed by an overseas company.
While it is true that these foreigners with greater spending power would contribute to growing the economy and boosting the tourism and hospitality industries, government, landlords and real estate companies need to start thinking about the bigger picture.
That is the risk of turning Cape Town into a housing market that primarily caters to international earners and rich investors who can outprice locals.
This could lead to a housing crisis where Cape Town would essentially turn into an Airbnb City, and Capetonians would be aliens in their own home town.
* Taariq Halim, Western Cape Regional Editor.
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