Dozens of cities around the world – including Amsterdam, Barcelona, Berlin, London, New York, Rome, San Francisco and Vienna – have already banned or imposed severe restrictions on Airbnb letting activity, and Cape Town and other SA cities could soon follow suit in response to new regulations for short-term letting that are currently being finalised by the Department of Tourism.
And this is likely to bring about major changes in both buy-to-let investment activity and residential property letting in these cities, says Andrew Schaefer, MD of leading property management company Trafalgar.
The main intention of the new DoT policy, which has been in the pipeline since at least 2023, is to bring short-term letting on Airbnb and other platforms into the mainstream tourism market, by making them follow similar rules to hotels, guesthouses, youth hostels and even backpacker lodges that have to be registered with tourism boards, pay hospitality taxes and comply with health and safety legislation. Airbnb owners will probably face many more compliance and tax requirements, and this may well discourage new and old buy-to-let investors from acquiring units specifically for short-term letting.
“In addition,” he says, “the new regulations may also restrict the total number of days a year that a property may be let on Airbnb and similar platforms. This has been done in other cities to make it less attractive to own a property that is exclusively let to short-term tenants and encourage those who do own such properties to convert them to long-term rentals that generate income all year round. In this way, authorities have sought to address concerns about the relative profitability of short-term letting leading to a shortage of affordable long-term rentals for local residents – as housing activists are claiming it has done in Cape Town.
“Recently named as the 2025 Best City in the World by Time Out magazine, the city attracts millions of tourists annually and has proved to be a goldmine for Airbnb owners over the past few years. But while Inside Airbnb recently counted more than 23 000 Airbnb properties in Cape Town, we could find only around 700 listings for long-term rentals in the whole of Central Cape Town at the start of January.
“Our research also showed that rentals for Airbnb and other short-term stays range from R950 a day all the way up to R20 000 a day and even more for luxury homes, especially along the Atlantic Seaboard. Long-term rentals are also much higher in Cape Town than in other major SA cities, with the single rooms in shared houses that are popular among students and working singles starting at around R4500 a month now, and even the smallest studio or bachelor apartments starting at around R5000 a month.”
Meanwhile, Schaefer notes, the new policy could also bring significant relief to the trustees and directors of the many Sectional Title (ST) and other community housing schemes that have been battling to change their conduct rules in the face of stiff opposition from the owners in their schemes who are exclusively letting to short-term tenants.
“There are now many ST complexes in Cape Town, Durban and Johannesburg where there is a near-constant daily or weekly turnover of short-term tenants in apartments and townhouses that are not ever occupied by their owners but have been specifically acquired and equipped as Airbnb units, and this frequently leads to problems maintaining the security of the complex, as well additional upkeep being required for lifts and other common property and conduct rules being ignored.
“However, despite the concerns of other owners and even long-term tenants about the negative effects on their property values and surroundings, it has proved very difficult to address these problems. While the Sectional Titles Schemes Management Act (STSMA) does provide for the conduct rules of a scheme to be changed by special resolution to restrict or even prohibit short-term letting, trustees have seldom been able to secure the number of votes necessary to do so – especially if there are many owners in the complex already profiting from letting through Airbnb.”
But the new regulations could tip the scales in the other direction, he says, by convincing many owners to either sell the properties they have been renting on Airbnb or convert them to long-term rentals.
“In either case, these owners would then have a vested interest in defending the security and the conduct rules of their schemes, not only to protect the value of their investments but also to attract prospective buyers or tenants in a market that is likely to suddenly become much more competitive, with many more homes available to choose from.
“In the medium term, this may also help to encourage more ST owners to volunteer as trustees and be more willing to engage professional property managers like Trafalgar to assist those trustees and ensure that their schemes are well run, compliant with all relevant legislation and offer a good quality of life to all residents.”
