Property

Cape Town pushes South Africans out of the city

Kirsten Minnaar • 4 February 2026

Rising property prices, surging demand from semigration and short-term rentals, and limited housing supply are pushing many South Africans out of Cape Town as rents in the city continue to outpace the rest of the country.

Recently, Cape Town once again made headlines after locals shared their gripes about the rising rents in the city.

In some cases, Capetonians have even been pushed out of certain areas entirely due to affordability issues. This problem is nothing new. Property and rental prices in Cape Town have been on the rise for years.

According to the latest PayProp Rental Index for the third quarter of 2025, the average rental price in the Western Cape increased to R11,635.

Despite recording rental growth of only 7% in the third quarter, the province remained the most expensive in South Africa for the seventh consecutive quarter.

In comparison, the average rental price across South Africa in the third quarter was R9,286 per month, over R2,000 lower than in the Western Cape.

Even this price difference is only one part of the equation. Capetonians often pay a premium for properties which are significantly smaller than properties in other provinces.

Many South Africans have attributed Cape Town’s affordable housing crisis to the growth of short-term rentals, specifically through Airbnb.

Given how popular Cape Town is among tourists and recent incentives to attract digital nomads – such as the Digital Nomad Visa – the demand for short-term rentals is only increasing in the city.

For property investors, the benefits are clear – they can charge much more for short-term rentals than for long-term rentals.

As a result, the number of properties available to locals decreases, further boosting the amount landlords can charge tenants.

Another factor skyrocketing the demand for properties in Cape Town is the semigration trend, marked by South Africans moving out of areas such as Johannesburg towards the Western Cape.

Even though this has slowed due to many companies reversing the remote work policies put in place during the Covid-19 pandemic, many South Africans are still migrating towards the Western Cape.

This is driven by a variety of factors, including the lifestyle appeal of coastal areas and improved service delivery.

Wise Move’s 2025 Migration Report revealed that in total, people moving from Johannesburg and Pretoria to the Western Cape accounted for 48% of all inter-provincial moves in South Africa.

The City of Cape Town responds

Daily Investor reached out to the City of Cape Town to explain what is causing the city’s housing affordability crisis and which interventions they have put in place to address it.

The city explained that most of the pressure in Cape Town’s housing market comes from South Africans moving there.

“Projections based on consumer retail data show a net inward migration of around 100,000 people from the rest of South Africa to Cape Town in the last 36 months alone,” the city said.

“Cape Town, like many thriving global cities, experiences upward pressure on rental costs due to an array of factors linked to market forces, demand.”

These include rapid urbanisation, the ‘semigration’ phenomenon, retirees seeking the city’s unique lifestyle, local remote workers, students, and tourism (both international and domestic).

It also includes Capetonians achieving social mobility, expatriates investing in local properties, and foreign buyers acquiring high-end holiday homes.

The city added that there are various housing segments, and each requires investment, whether private, public-private, or subsidised, through the city’s or national housing programmes.

“It must be noted that Cape Town’s housing stress is not foreign-made, investor-made, or Airbnb-made. It is supply-made,” the city explained.

“When a city grows, its housing stock must grow with it, in volume, in typology, in density, and in spatial spread.”

The city stressed that interventions are needed to make it less bureaucratic and time-consuming to build new housing in Cape Town, “which has been a strategic focus of our Mayoral Committee”.

They added that Cape Town is leading the way nationally with several initiatives. These include –

Land release for affordable housing: In the past two years, Cape Town has released more land for affordable housing than in the previous 10 years, with a pipeline of 12,000 well-located affordable housing units close to the CBD and other key parts of the metro.
Land discount guidelines: The city has published guidelines allowing City-owned land to be heavily discounted, maximising the number of social housing units developed – a national first.
Utility discounts for social housing: Cape Town is offering significant discounts on water, electricity, and property rates for social housing properties, another first.
Municipal planning by-law amendments: The city is working to streamline development approvals and reduce red tape, especially by micro-developers building small-scale units.
Support for micro-developers: Cape Town is providing micro-developers with pre-approved building plans and development charge discounts to encourage the safe and compliant construction of small-scale rental units in townships and areas of highest demand.

Daily Investor also reached out to the DA to speak on Cape Town’s affordable housing issue. However, they did not respond by the time of publication.

Listed below are some “expensive” properties at different price points currently available for long-term rent in Cape Town, along with their sizes.