Rent in Cape Town has been notoriously high for years, and now is so unbearable that people are having to leave the Mother City in search of lower living costs elsewhere in the country.
Photographer: Dwayne Senior/Bloomberg via Getty Images
Rent in Cape Town has been notoriously high for years, and now is so unbearable that people are having to leave the Mother City in search of lower living costs elsewhere in the country.
Former Cape Town renters have cited the rise of digital nomads moving to the city, as well as remote workers semigrating from other parts of the country, as reasons for soaring prices.
“For my practice, I rented space in a gym, which made life a little bit easier because private practice in medical centres is much more expensive,” biokineticist Fatima Motala said. “So rental for my business was manageable; it was just housing rental that was unbearable and led to me to leave Cape Town.”
Motala said she could manage paying for the basics, but rent in Cape Town was too high.
“October to March is a great time to be in Cape Town. And so they [landlords] inflate housing prices so much because people are coming from overseas with their pounds and dollars. It’s almost impossible to compete with our rands,” Motala said.
Motala moved home at the end of November 2023, because she had “taken a knock financially” while living in Cape Town.
“I have now been looking at renting in Johannesburg and it baffles me when I see what I can get in Johannesburg for the same amount of money I was paying in Cape Town,” Motala said.
“I have a friend who lives in a studio apartment in Greenpoint and she is renting for R12 000 and in Joburg you could get a two bedroom for that amount of money.”
According to PayProp’s Rental Index for the fourth quarter of 2023, the Western Cape is the most expensive province for renters. The Western Cape had been approaching an average rent of R10 000 at the start of 2023, the index notes. In the fourth quarter “it finally crossed the line”, reaching R10 118 — up R382 from a year earlier.
To put this figure into perspective, the median rent in Gauteng was R8 864, which is about the national average.
Tumi Mohapi is a lawyer who has lived in Cape Town for eight years. At the start of this year, she moved to Joburg because rent prices were so high in the Mother City. What one paid for a two-bedroom apartment eight years ago versus now is very different, she said.
“Moving further out of the city has become the more affordable route. But then you have to deal with being stuck in a lot more traffic or move into an area that is not exactly that safe, so that is the toss-up,” Mohapi said.
In 2015, Mohapi lived in Claremont, one of Cape Town’s sought-after southern suburbs, and paid about R11 000 for a two-bedroom apartment. She shared the flat with a friend to cover the cost.
Fast forward to 2023 and Mohapi paid R14 000 for a two-bed apartment in Century City. “Even that was a bargain, because anything else was starting at about R16 000,” she said.
“That was in Century City, which is not far from town but you’re not in town. If I was looking for the same thing in Cape Town CBD I would have been paying for way more.”
Unlike her friends who opted to live further away from their places of work in central Cape Town, Mohapi was intent on staying as close as possible to work but had to “take the blow” of the high rent.
“I left Cape Town because, when you weigh up how much people get paid versus rental, it was astounding. It was not worth staying there anymore. These are the ultimate results of being driven out of the city because of rental and all the other considerations,” Mohapi said.
Now having moved to Johannesburg, Mohapi could have gone with an even cheaper rental, but she now has a bigger home for less than what she was paying in Cape Town. “That’s already a win.”
Motala noted that another reason for the high rent in Cape Town is that, since the Covid pandemic, more people have been able to work remotely. Many young people consider moving to Cape Town because of the lifestyle — a fact that has sent rental prices soaring.
According to the Provincial Economic Review and Outlook for 2022-23, the Western Cape gained 292 325 citizens from 2016 to 2021. The provincial government anticipates that the population will reach 10 million people by 2040, up from 7.3 million currently.
John Loos, a property economist at First National Bank, said it is difficult to say to what extent digital nomads have changed Cape Town’s residential property market.
Loos believes that the influx of semigrants is more apparent in Cape Town’s property data than an increase in the number of foreign remote workers in the city.
Statistics South Africa’s November 2022 residential property price index showed that Cape Town home and flat prices have surged 141% since 2010, outstripping other metropolitan municipalities. Johannesburg prices rose 71% in the same period.
The Western Cape’s land scarcity issue has added pressure to Cape Town’s property market, Loos said. “But this is nothing new.”
He said the Western Cape is better placed to retain highly-skilled labour compared to Gauteng, contributing to the higher demand for land to be released for development.
“High skilled labour drives economic performance and that too will eventually drive property values up,” he added.
Erwin Rode, an economist and the chief executive of Rode Property Consultants, said there isn’t data to support the hypothesis that rental prices are being inflated by digital nomads. Rather, the opposite might happen as remote workers flee Cape Town to escape high rent prices.
Pointing to what happened in San Francisco, Rode noted that people end up leaving attractive cities because of higher living costs, often moving to neighbouring towns to work remotely.
“Why live in a very expensive city when you can live in a friendly town maybe 100km from Cape Town?” Rode said.