Cape Town Residential Letting | State of the Market | Summer 2023

Cape Town is a city renowned for its scenery, culture, stable service delivery and a desirable lifestyle that attracts people from all over the country and, indeed, the world. The city's residential letting market has been influenced by a series of factors in recent years, including semigration, a shift from long-term rentals to short-term letting and rising interest rates. These factors are expected to continue to shape the market over the coming months.

Semigration, the trend of people moving from other South African provinces to the Western Cape, has been a driving force in Cape Town's property market for several years and remains an influencing factor, increasing the demand for residential property to let.

The short-term letting market, fueled by platforms like Airbnb, has drawn many property owners away from the traditional long-term rental market. This shift has reduced the availability of long-term rental properties, particularly as we approach the summer months so popular for tourists visiting the region.

Interest rates play a crucial role in the property market. As South Africa grapples with rising inflation and economic pressures, the SARB has been compelled to increase interest rates to control inflation. Higher interest rates make it more expensive to finance property purchases, leading to a slowdown in property sales and more individuals opting for rental properties instead of buying, again putting pressure on supply.

All things considered, it is no surprise that we at Steer & Co have seen our vacancies remain at low levels and any properties available to let, attracting healthy interest and relatively short turnaround times.