Dozens of cities worldwide—including Amsterdam, Barcelona, Berlin, London, New York, Rome, San Francisco, and Vienna—have already imposed bans or severe restrictions on Airbnb letting activity.
Cape Town and other South African cities could soon follow suit, as the Department of Tourism finalises new regulations for short-term rentals.
These changes are expected to have a significant impact on both buy-to-let investments and residential property letting, according to Andrew Schaefer, MD of leading property management company Trafalgar.
The core aim of the new Department of Tourism policy, which has been in development since at least 2023, is to integrate short-term rentals on Airbnb and similar platforms into the broader tourism market.
The regulations would require these rentals to adhere to the same rules as hotels, guesthouses, youth hostels, and backpacker lodges, including registration with tourism boards, payment of hospitality taxes, and compliance with health and safety standards.
Airbnb owners are likely to face more compliance and tax requirements, which could deter both new and existing buy-to-let investors from purchasing properties specifically for short-term rentals.
“In addition,” Schaefer said, “the new regulations may also limit the number of days a property can be rented out on Airbnb or similar platforms. This approach has been adopted in other cities to make owning a property exclusively for short-term rentals less appealing.
“The goal is to encourage owners to convert these properties into long-term rentals, generating income year-round. Authorities have aimed to address concerns that the profitability of short-term rentals has contributed to a shortage of affordable long-term housing for local residents—a problem housing activists say is evident in Cape Town.”
Cape Town attracts millions of tourists each year and has become a lucrative market for Airbnb owners. However, according to Inside Airbnb, there are over 23,000 Airbnb listings in the city, while only around 700 long-term rental listings were available in Central Cape Town at the start of January.
Schaefer’s research also reveals that Airbnb and other short-term rentals in Cape Town range from R950 per day to R20,000 or more for luxury properties, particularly along the Atlantic Seaboard.
Long-term rental prices in Cape Town are also significantly higher than in other major South African cities, with shared rooms starting around R4,500 per month and even small studio apartments going for about R5,000 per month.
Schaefer further noted that the new policy could provide relief to trustees and directors of Sectional Title (ST) and other community housing schemes struggling to change their rules in response to opposition from owners who exclusively rent out their units as short-term lets.
“Many ST complexes in Cape Town, Durban, and Johannesburg have seen a constant turnover of short-term tenants in properties that are never occupied by their owners, but are instead set up specifically for Airbnb rentals,” Schaefer said. “This often leads to security concerns, increased maintenance costs for shared areas, and violations of conduct rules.”
Despite these issues, it’s been challenging for trustees to change conduct rules, as the Sectional Titles Schemes Management Act (STSMA) requires a special resolution to amend rules, and securing the necessary votes can be difficult—particularly if many owners are profiting from Airbnb.
However, Schaefer believes the new regulations could shift the balance, encouraging owners to either sell their Airbnb properties or convert them to long-term rentals.
“In either case,” he said, “these owners would have a strong incentive to support the security and conduct rules of their schemes, not only to protect their investments but also to appeal to potential buyers or tenants in a market where competition is likely to increase with more properties available.”
