Could Cape Town be the next global city to resort to bed-sharing rentals for lack of good and affordable long-term rental stock?
This question lingers as the city's long-term rental market reaches unprecedented levels of insanity, with properties disappearing from listings within hours, especially in the most wanted areas.
This is especially true for this time of the year, when short-term lets peak from December to March, as the tourism season booms, says Chad Shapiro, sales and marketing manager for Lew Geffen Sotheby's International Realty in the City Bowl and Atlantic Seaboard.
Landlords - enticed by these short-term rentals - are adding to the scarcity of long-term options, and the high-tenant demand from across the country and even abroad is driving prices to new heights.
Ross Levin, licensee for Seeff Atlantic Seaboard and City Bowl, says rental rates in Cape Town have reached staggering figures such as R134,000 per month in Bantry Bay.
Levin expects the market to get even busier with the bumper tourist season expected, and expects semigration to further boost demand as we head into 2024.
Recent reports confirm that international arrivals to Cape Town airport have now exceeded the pre-pandemic levels, says Basil Moraitis, regional manager for Pam Golding Properties in the Western Cape.
He affirms that the Cape currently has one of "the most acute shortages in rental stock in over a decade".
The desperation to get a long-term rental at an affordable price is not unique to Cape Town.
For instance, in Canada a person reportedly advertised half a bed to let. The Facebook Marketplace listing, which has since disappeared after going viral, suggested the lucky room mate would get to either share a queen bed or “we could [buy] a double deck bed”.
And in China, joint tenancy of a room is an option, with one tenant letting the place to sleep overnight and another tenant - who works night shift - renting the same cubicle/room to sleep in during the day.
According to Brett Leon, managing director of Lew Geffen Sotheby's International Realty in the City Bowl and Atlantic Seaboard, the morning-to-noon listing-to-taken rental vanishing act in Cape Town is most prevalent in sought-after areas such Sea Point, Bantry Bay, Gardens, and the City Centre.
While the root cause of Cape Town’s rental market issues extends beyond Airbnb's impact, the short-term let phenomenon is certainly one of the significant factors.
With 21 000 Airbnbs available (concentrated mostly in tourism hotspots), Cape Town has more listings than Amsterdam, San Francisco and the city-state of Singapore combined, according to the latest data from Inside Airbnb.
Leon says beyond Airbnb’s impact, Cape Town is a magnet for those seeking a more desirable lifestyle, leading to a surge in semigration from cities such as Johannesburg and Durban, along with internationals coming to live and work here.
The influx of new developments and businesses - such as Amazon’s head office - further amplifies the demand, while the ability to work remotely fuels the rental frenzy, says Leon.
Another factor is interest rates, which have risen by about 5% in almost two years, prompting potential home buyers to turn to renting instead.
Odette Maartens, head of rentals for Dogon, says rentals range from a spacious two-bedroom luxury apartment in Kenilworth for R24 000 per month to a lavish six-bedroom house in Kenilworth Upper for R100 000 per month.
Sonya Garisch and Jaqui Bush, rental agents with Seeff Constantia, have achieved rentals of up to R120 000 per month in the suburb.
The Atlantic Seaboard has rentals ranging from R12 000 per month for a studio apartment in Tamboerskloof to R95 000 per month for a 3-bedroom home in the area, they say.
Seeff’s Levin says the highest rental rates he has seen include: R134 000 per month in Bantry Bay; R112 000 at the Waterfront; R95 000 in Mouille Point; R85 000 in Tamboerskloof; R65 000 in Sea Point, Three Anchor Bay and in the CBD.
But it is not only the higher end of the market in tourist hotspots feeling the pinch.
Property entrepreneur Darren Francis, who launched his property career in the Mitchells Plain, says the rental market has seen an even bigger surge in the affordable market where rentals range from R3000 to R8000, and where there has been a lack of investment in developments recently to serve an influx of renters to the market who cannot afford to buy their own home.
“Just this week, advertising three units in Mitchells Plain for rent we had more than 170 email enquiries and more than 160 social media comments on this one post.
“The affordable market lacks good quality and affordable accommodation. This problem will only grow exponentially over the next few months. Competition for accommodation in these areas is tough as there are many people looking for affordable accommodation,” said Francis.