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A sure sign of Cape Town’s Airbnb boom

‘Affordability’ fast becoming a myth….

An apartment development on Cape Town’s Foreshore sold R220 million worth of units one week after launch in late March. That in itself is not news. What was noteworthy was the starting price of apartments: R1.26 million, completely unheard of in the City Bowl.

To achieve this price point, The Rockefeller offers apartments between 23 square meters (m2) and 44m2. The 23m2 units are sandwiched in next to a larger (35m2) corner unit on each floor, and it is almost certain the starting price was only for the smallest apartment on the first floor only.

While there’s no doubt that a price of around R1.3 million is affordable for the Cape Town CBD, what you’re getting for that price is venturing into the absurd. Some coverage has described these as ‘micro apartments’, but these make typical studio apartments in the north of Joburg seem palatial. The 23m2 apartment is a foot deeper than my (small) townhouse garage!

Out of the 25 units on each floor, all but four are studio apartments, i.e. they have no separate bedroom. In the case of the 23m2 and 25m2, there is not even space for a couch, making these not dissimilar to a hotel room. Quite how one would fit much more than a microwave and two-plate stove top in the ‘kitchen’ is a mystery.


One has to question the “affordability” label, given that the average price per square metre for most of the development is comfortably above R55 000!

According to a public price list, 174 of the 240 apartments had been sold as at April 4 (units on the uppermost floors will be operated as a hotel). The developers reported over 300 people in attendance at the Johannesburg launch event.


(Apartment -05)

(Apartment -16)

(Apartment -24)

5th floor

R1 337 500

R1 635 000

R2 343 500

6th floor

R1 362 500

R1 665 000

R2 386 500

7th floor

R1 388 750

R1 696 800

R2 432 080

8th floor

R1 414 500

R1 728 000

R2 476 800

9th floor

R1 440 000

R1 758 000

R2 519 800

10th floor

R1 465 000

R1 788 000


* As at April 4

These smaller apartments are perfect for short-term (read: Airbnb) rentals. And there’s no surprise that there has been significant demand for units. This is a hotel in all-but-name, masquerading as affordable housing.

At an in-season rate approaching R1 000 per night, and with occupancy across a year averaging a not-demanding 65%, you’ll be more than covering your bond, levies and expenses. This is why there are mad scrambles for units as developments are launched in the city.

Now, it would be unfair – and unreasonable – to point to a single development only as evidence (or the cause) of rampant residential property price inflation across the Cape Town metro. The failure of urban planning (there’s been a vacuum for decades, evident across all cities in the country), is exacerbated in Cape Town because of geography: there are mountains and ocean in the ‘way’. In other cities, the ‘solution’ has been never-ending sprawl.

And, the house price situation in Cape Town (or the CBD) is not the developer’s fault either. Or, indeed, the fault of all property developers who’ve been adding residential blocks at break-neck speed. Basic economics teaches us about demand and supply. Ryan Joffe, one of the developers, is right when he says the market is “over-subscribed and under-supplied”.

Take a walk from Gardens to the Foreshore, and then towards Green Point. There are residential developments under construction everywhere.

Residents have been all but priced out of the City Bowl and the ‘gentrification’ of areas like Woodstock and Salt River are extending the problem eastwards too. But, as much as we think of this issue being unique to the Cape (or some other South African cities), it simply isn’t. The Bay Area in the US is an extreme example. As much as the City of Cape Town is trying to play catch up with a big shift in housing policy, this is decades overdue. But, that’s something for another day entirely….

Hilton Tarrant can still be contacted at

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Affordable property in Cape Town became a myth a long time ago. And even a crisis like the drought hasn’t really slowed sales down that much.
With the property boom comes problems like traffic congestion, an increase in beggars, over development and urban planning rules flouted – all these ( and more) are problems being experienced in Cape Town currently.
But perhaps they are small price to pay for the stimulus to the economy and job creation that benefits our Mother City.

This from FNB last week:

“The FNB Western Cape House Price Index has slowed to what Loos describes as a “lowly” 1.5% year-on-year (y/y) growth for the first quarter of 2018. House price growth in the province is now below the national average house price growth rate of 2.6% for the first quarter.”

I’d say it’s slowed right down!

Remember the cure for high prices is high prices. If developers see these high prices being paid for these units they will be inspired to develop more. As the CBD fills up the developers will start looking at nearby areas. There are plenty of run down properties in Salt River and Brooklyn which can be redeveloped and densified. All this new supply will not only drive down prices, but supply jobs to people so they can afford to buy them.
Much better than discouraging developers by trying to insist that they offer units for less than what they are really worth. Just be pleased that people have that confidence in our city.

currently there are +- 1500 properties advertised for sale in CT City Bowl on private property, 500 of them in the CBD itself. lots of people regret having bought in CBD. no one will tell you this though. take a walk through CT CBD, it is simply third world, an extension of khayelitsha.

Woogoodly when were you last in Cape Town city center. For a youngster of any colour that place is alive.

55000 a square is in no way affordable.

It is literally the same amount of space as two parking bays at R650000 each

Scrolling down to the The Rockefeller image (of that micro apartment), I…err…had to LOOK TWICE to make sure I’m not looking at a 3D cutaway taken from a CARAVAN website!! 😉

(….am willing to place a bet that the interior of a double-axle “Jurgens Exclusive” caravan is likely bigger.)

This is horrendous. It’s incomprehensible that any “investor” could’ve fall for this bearing in mind that Cape Town is experiencing a huge water crisis. The comments via social media when Cape City Metro had announced the 3 year increments for rates taxes and ESPECIALLY water is already a clear indication that the ordinary tax payer has been pushed beyond limit, especially pensioners. Previously our annual holiday destination was always Cape Town. However, as the City and surrounding small towns have become such bloated money cows we are now visiting cheaper coastal destinations year on year. Within a couple of years Cape Town will be the most expensive city to visit/live, which begs the question: Is that what you want for your Tourism Industry? Good Luck Cape Town – you’ll be writing your own memorial as this will go belly up.

There’s already a revolt in the making, judging by comments on the Water Shedding FB page, and various online petitions.

The DA are in for a gatskop come 2019…

Really, and who are the gatskoppers going to vote for in place of the D?

Please do enlighten us jock.

I suppose if there’s demand, these units must be priced right. (yikes…!)

That people, is the result of FEARING dreaded long daily commutes in and out of the City Bowl 🙁
Is commuting really so hard on a feisty Vespa 300?? (On a maxi-scooter, you’ll find silly excuses to go and ride…first to buy a carton of milk at the furthest cafe….and then do another trip to buy the bread 😉

I pity the semigrant pillocks who blew their R6Million wad on matchbox-sized townhouses in Kenilworth….

Jusdging by P24 listings, sellers are getting about 30% less than asking at the moment, so basically the WC housing market has collapsed.

The graph of WC property inflation on Loos’s report is heading montonically downward, whereas that for other regions (especially KZN) are on the upside trend.

The pillocks who bought at the top of the market last year during their Shirley Valentine romance with Cape Town will have to sit out this market for a good few years and face the prospect of Day Zero and the loss of the WC/CT to an opposrion coalition. At best they can expect a CT Mayor or WC leader going by the name of Madikizela….best of luck on that, pillocks.

Every country has it’s LA LA land where the fakes , trustnicks pimps and druggies flock, ours is Cape Town- let them all huddle together.

Hilton – you clearly have not been to Paris – 23, 33 and 43m2 apartments are quite the norm – and pricing more than triple. The median R per m2 in New York is 10x. So why not some comparables next time before making such fleeting statements.

To give everyone an idea of the (crazy) DEMAND for residential (and commercial) space….which seems not letting up (despite most commenters’ gloom that it will implode), the following news is HOT OFF THE PRESS:

Ratanga Junction is set to close permanently on 1 May, making way for a 120,000sqm mixed-use development (residential/commercial/shops/possibly retirement units). This is surely an indication of high demand: say goodbye to entertainment-space, and replace it with residential & commercial space. Madness?

See link below:

Well a little different from this and the comments and; disclaimer, I own property in CT but don’t live there. I had business recently; indirectly with COCT infrastructure and was horrified to see, first hand, that vandalism and theft (of said COCT infrastructure) in a “good” industrial area is well worse than Durban. City officials just shrugged their shoulders and noted “it is out of control”. As for the city centre etc; Table Mountain park is hike / bike etc at your own risk and Long St at night is high risk for theft; in my humble opinion of course.

That is what happens when you affirmatize a successful city, bringing in an acceptable face of color.

I have had similar experiences of poorer service in the past over the last 2 years when before service excellent. No all bad though as we get sewerage and water issues attended to promptly.

Since Maimane/Whatever came to lead the DA it has lost some local focus to get national focus. Big mistake by a political pipsqueak.

Wonder how many know that by about 1990 TB was just about wiped out in Cape Town and gansterism dealt a big blow by the military being in townships.

A few misconceptions in the comments that I’d like to clear up.

1. The drought in Cape Town is a result of poor management by the city & the DA’s general unwillingness to hold the middle classes accountable for inequitable use of resources. It’s not something that should influence the long-term feasibility of property investment in the city.
2. CBD property is a confusing investment to me. I don’t know a single person who has invested in the CBD and achieved cash-flow positive returns, most people are buying, running at a loss, and waiting for the property to appreciate, which to me fits the lesser fool theory perfectly.
3. There is no clear data source on vacancy rates for AirBNBs, but for the opportunities I’ve investigated, it’s somewhere in the range of 75%!
4. The outlying suburbs – tableview, etc can almost always generate a positive cashflow. This is because a place like tableview caters to an emerging middle class, a segment where there will always be demand.
5. If you are not an outright Trump-backing hillbilly who can’t tolerate being anywhere close to people of color, the CBD offers probably the best quality lifestyle you can find in South Africa. You don’t need a car, you can walk almost anywhere, at any reasonable time of day, and you have access to the most modern infrastructure in the country – fibre internet, brt buses, clean streets, police on every corner, etc, etc.

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