Image Source: Private Property
Local – Award-winning journalist and author Rebecca Davis has questioned the long-standing narrative that foreign buyers in Cape Town are confined to the city’s wealthiest neighbourhoods, after an investigation into Airbnb listings uncovered a different pattern.
Davis said the city’s official position, that foreign purchases only affect the top end of the market and therefore do not compete with locals, is simply not true. With no centralised data on foreign property ownership, Davis turned to Airbnb listings as a workaround, filtering out property managers and South Africans temporarily based abroad.
“What I was left with was over 700 people based overseas… the top 10 hosts that I looked at who are based overseas own 73 properties between them.”
Cheaper Suburbs, Not Just Luxury Enclaves
The pattern extended well beyond the city’s wealthiest pockets, turning up in areas not typically associated with high-end foreign investment. Davis said her findings undercut claims that foreign buyers stick to luxury coastal suburbs, pointing instead to cheaper flats and properties in areas where ordinary Capetonians live.
“This idea that foreigners are only buying the best properties in the wealthiest suburbs is simply not true. I found evidence that a lot of them are buying now in places like Goodwood, in the northern suburbs, in Garden Cities, and even in one case in the traditionally coloured fishing community of Hangberg above Hout Bay.”
Claims that this activity benefits the South African economy don’t hold up once foreign ownership is accounted for, either. Davis disputed the idea that foreign-owned Airbnbs significantly boost the local economy, arguing that money earned from foreign guests staying in foreign-owned properties often never enters South Africa at all.
“That money is not going to South Africa. That money is going into this foreign national’s bank account in a foreign currency in a foreign country… Airbnb doesn’t pay tax in South Africa like Uber and all the other big tech companies.”
Calls For Tighter Regulation
Davis said the City of Cape Town and Mayor Geordin Hill-Lewis did not respond to detailed questions sent ahead of publication. She added that possible interventions exist, including higher rates on foreign purchases and caps on the number of properties a foreign national can own.
“This thing of property hoarding, where you can buy 10 different properties as a foreign national without even setting foot in South Africa, is really something that I think has to be addressed.”
