How do software developers afford Cape Town rental

[calypso]

I recently moved from PE. Like for like is about double property wise. Everything else is much the same.

 

[fruitbat]

Another Example... I sold a bachelor pad (36m2 with covered parking bay) in Marlborough Park, in Claremont a year ago for R550k, and at the time I was renting it out for R4400/month. And this was the norm for the bachelor pads in that complex.
This was a great complex - awesome security, pool, gardens etc etc.
I think going rental now is around 4700-5000

 

[Nerfherder]

I just want to rant about Cape Town.

Cape Town is the go to place for startups and software developers. I find a lot of software dev jobs here in and in classified it has way more opportunities listed.. Problem is rental is sky high. Not just talking about City Center but also the Southern Suburbs. Rental for a room in Rondebosch with no parking easily exceeds what you rent for a 3 bedroom townhouse with two garages and a garden in Joburg despite the Cape Town houses on the outside not looking nice or being much older

Travel times from the Northern suburbs and places like Blouberg make the money on petrol and hours wasted in the car daily not worth while if you want to rent fudther away.

Car insurance premiums will be sky high due to street parking. Even super successful companies like SAP need employees organize lift clubs as you rarely get enough office parking

House breaking seem to be a way of life here and people don't even report to police when it happens. In joburg at least aren't as brazen as they know owners there carry guns. Petty criminals here are able to make a living off it if you live in an area near transport routes.

Salaries here are much lower. For example an entry level call center agent or computer or network technician 's salaries advertises at R5K. For the same job in Joburg I found it advertizes at R15K.

My question is for other people in the IT sector who have moved to Cape Town. How do you manage it here?

You have to be clever and make compromises.

I just married a rich woman

Cape Town is one of the most beautiful places in the world to live... so unfortunately it comes at a cost. Also you need to find a way for it to work... that's the trick.

Some guys get bikes, others get bicycles. Share a flat with a mate ? You have to be on the lookout for deals and cheaper options.

I have always found that you need to be open to doing things differently... things have a funny way of working out.

 

[AthenianOwl]

Another Example... I sold a bachelor pad (36m2 with covered parking bay) in Marlborough Park, in Claremont a year ago for R550k, and at the time I was renting it out for R4400/month. And this was the norm for the bachelor pads in that complex.
This was a great complex - awesome security, pool, gardens etc etc.
I think going rental now is around 4700-5000

That's... not bad hey. Security is my no.1 concern when looking for a nest.

 

[Flojo]

People should too have remote working included in there employment contracts.
This is 2015.
In this day and age, this "have to be at your desk and working" mentality is long gone.

Where I work, the sysadmins, devops etc all can work from home and work flexi time.
And its a great model, for most of us return the hours late in the evening / early morning, that we took.

Its "Google" type companies we want to work for, in this country.
You be amazed by how much you save.

So although you may not get more in physical monetary terms for your salary, you save to earn more.

Hope I make sense.

 

[satanboy]

People should too have remote working included in there employment contracts.
This is 2015.
In this day and age, this "have to be at your desk and working" mentality is long gone.

Where I work, the sysadmins, devops etc all can work from home and work flexi time.
And its a great model, for most of us return the hours late in the evening / early morning, that we took.

Its "Google" type companies we want to work for, in this country.
You be amazed by how much you save.

...

Ja right...there are lots of them out there. I work for a large corporate and their thinking is stuck in the 1950's. They don't trust their employees who sit 10 metres from them.

 

[zaozzie]

I just want to rant some more

Where are all these high tech jobs for software developers in Cape Town? Silicon Valley the average tech salary is over $100K per year. In Cape Town the average tech salary I've found is a tenth of that but room rental matches that of Silicon Valley. Even if you are lucky and earn a very good salary R30K to 40K which is very rare and then you deduct tax, decent apartment rental, car repayment, car insurance, medical aid, food cost you don't have anything left.

Hard to understand how a software developer can be successful living in Cape Town.

Right now the movie the Interview sums up how I feel about Cape Town.






Cape Town might be touted as a tech city a but I find this label is used by real estate entrepreneurs who convert a few buildings in Woodstock in co-working spaces making use of the tax incentive of Cape Towns Urban Development Zone scheme.
Lots of people owning multiple properties renting our apartments or houses for crazy amounts of money to tourists, converting houses and renting out to students, to the stay at home family building and renting out a granny flat.

It seems everyone who has grown up in Cape Town has a a finger in real estate.

 

[semaphore]

I would never move to cape town for a tech job. Very overrated. Plus no company down there would ever match my salary.

 

[Nefertiti]

I just want to rant some more

Where are all these high tech jobs for software developers in Cape Town? Silicon Valley the average tech salary is over $100K per year. In Cape Town the average tech salary I've found is a tenth of that but room rental matches that of Silicon Valley. Even if you are lucky and earn a very good salary R30K to 40K which is very rare and then you deduct tax, decent apartment rental, car repayment, car insurance, medical aid, food cost you don't have anything left.

I cant speak for Cape Town but in Johannesburg recently I found salaries advertised for senior developers were in some instances lower as well. But when it came to offers and so on it was higher so not sure if that is a recruitment strategy and why they would do it. Are you talking about the advertised costs?

Also the salaries you posted for Silicon Valley is huge, but I think they are in a different ball game altogether. Yes there is drudge work but the people that get the good salaries you mentioned above is for people that know how to tweak every last bit of performance from the hardware and software they got or come up with some novel physics engine etc etc. And those guys have mobility so companies are willing to pay to hold on to staff. The other thing you have to keep in mind is that startups dont pay that well either (here or the states). Developers might get share options and so forth so when it does go big it pays off.

 

[Flojo]

I just want to rant some more

Where are all these high tech jobs for software developers in Cape Town? Silicon Valley the average tech salary is over $100K per year. In Cape Town the average tech salary I've found is a tenth of that but room rental matches that of Silicon Valley. Even if you are lucky and earn a very good salary R30K to 40K which is very rare and then you deduct tax, decent apartment rental, car repayment, car insurance, medical aid, food cost you don't have anything left.

Hard to understand how a software developer can be successful living in Cape Town.

Right now the movie the Interview sums up how I feel about Cape Town.


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Cape Town might be touted as a tech city a but I find this label is used by real estate entrepreneurs who convert a few buildings in Woodstock in co-working spaces making use of the tax incentive of Cape Towns Urban Development Zone scheme.
Lots of people owning multiple properties renting our apartments or houses for crazy amounts of money to tourists, converting houses and renting out to students, to the stay at home family building and renting out a granny flat.

It seems everyone who has grown up in Cape Town has a a finger in real estate.

So I hear what you saying, but there is only one thing I have a problem is, if we earned like we did in Silicon Valley, the rent / crazy prices problem wouldnt go away. Infact it would get worse.

I try and find the article, but I read that there in Silicon Valley, there too, the prices for apartments is out of control (Much like San Fransisco).
Apparently the new tech hub / realistic prices hub is Portland.

 

[kripstoe]

My speculation:

One impression that I have is that a lot of SA software development has become commoditized: Developers in SA have been moving towards effectively building content for companies, rather than developing new technology, which was more of a focus back in the day (90's). Although these "content creators" are often highly skilled programmers, it a) tends to be more accessible (no Maths II, no 3rd year non-CS subjects, etc. - which incidentally was a requirement to get a BSc in CS from UCT), and b) increasingly employs many more people than those companies developing technology. The combination of these resulted in an increasingly higher supply vs. demand, which has meant that salaries haven't kept up.

I recall back in the late 90's many new honours and masters graduates were earning significantly more than senior university staff, accountants, doctors, dentists and lawyers (of comparable seniority) at the time. Although income has gone up across the board due to inflation, my impression is that developers have increased slower than the other professions, and probably slower than inflation too.

Another point that I also believe affects developers more than the other professions, is the expectation that developers become managers as part of their normal career progression. This is also something that follows from commoditization: there's always someone to replace "the 32 year old", who just became a manager. In contrast, for doctors, lawyers, accountants, dentists, university staff, etc., practicing in their profession is a usually a terminal career point. The net effect of this is that development is viewed as a "junior" role (even for "senior developers" or even architects), while management is considered "senior" - fundamentally, the old-school "How many people in your fiefdom?" mentality. This tends to inflate manager salaries and deflate developer salaries, creating glass salary ceilings. Connecting this to the last point: paired with the additional supply, being a developer today is a lot less glamorous than it was in the late 90's (relatively speaking - I still think it is an enjoyable and possibly lucrative career path).

Can't really find anything I do not agree with in your response, especially the last paragraph. We're trying to do more R&D to develop new tech, but it's a challenge to get hands to not build content, as building content is what is paying the bills. Luckily our management does realise that building content only doesn't get you out of the competition game ad you need new tech also.

 

[kripstoe]

Buy a place instead. It's almost always cheaper or about the same.

I have a massive laugh when I found out my neighbour was renting for exactly the same amount I pay for my bond and the two houses are virtually identical.

People are willing to pay for it and therefore people charge for it. Especially around the student areas of UCT and such.

Indeed. The prices close to CBD are crazy though.

 

[kripstoe]

Cape Town might be touted as a tech city a but I find this label is used by real estate entrepreneurs who convert a few buildings in Woodstock in co-working spaces making use of the tax incentive of Cape Towns Urban Development Zone scheme.
Lots of people owning multiple properties renting our apartments or houses for crazy amounts of money to tourists, converting houses and renting out to students, to the stay at home family building and renting out a granny flat.

It seems everyone who has grown up in Cape Town has a a finger in real estate.

Colleague sold his property in Woodstock last month. Even he felt it was a ripoff. :wtf: But hey, someone was willing to pay the price for it.

 

[zaozzie]

Colleague sold his property in Woodstock last month. Even he felt it was a ripoff. :wtf: But hey, someone was willing to pay the price for it.

So your colleague is dealing in real estate on the side?

 

[Joker]

There has been a huge influx of people moving to Cape Town in the last 10 years, but its a small city never built to cater to that demand. Property prices just reflect that.

Also no idea where the 'Cape Town has a great startup tech industry' image is coming from. Most of my friends are programmers and the majority are all working for the usual corporates. The few that work for startups earn very little and still live almost student lifestyles.

 

[kripstoe]

So your colleague is dealing in real estate on the side?

No. He bought a couple of years ago and renovated the place. I've dealt with a couple of estate agents recently, and apparently people are now putting in offers above asking prices to secure property.

 

[Nefertiti]

There has been a huge influx of people moving to Cape Town in the last 10 years, but its a small city never built to cater to that demand. Property prices just reflect that.

Also no idea where the 'Cape Town has a great startup tech industry' image is coming from. Most of my friends are programmers and the majority are all working for the usual corporates. The few that work for startups earn very little and still live almost student lifestyles.

Cape Town is selling and setting itself up like that. See Silicon Cape initiative http://www.siliconcape.com/, though they not the only group to promote that.

 

[Nefertiti]

No. He bought a couple of years ago and renovated the place. I've dealt with a couple of estate agents recently, and apparently people are now putting in offers above asking prices to secure property.

that is rough

 

[StrontiumDog]

If you look at mid to high-end flats and townhouses, Jozi and CT are quite comparable, with Jozi being 1-2 grand cheaper based on the sheer number of available properties.

The main advantage of starting out in Jo'burg is that there are hundreds of new, cheap complexes continuously being built. The result is that there is an oversupply of property and lower demand, which drives the price down. In my complex on the east rand, there are almost always 3 or 4 units available for immediate occupation at any given time. Nearly new 2 bed flats of around 80m^2 cost 4500 - 5000 per month with modern finishings etc. A 55m^2 flat in Royal Ascot would cost 6500 to 7000.

Also, space is very limited in CT. Construction costs are higher due to space constrictions as well as terrain. Gumtree is like a skirmish and you will have people fighting for viewings on the first day the property was listed. It is crazy.

80m2 in The Island Club (century city) is about 11 or 12k for rental if I am not mistaken. To buy it will cost just under 1.9 million.

 

[Progenix Oj101]

How expensive is it really though? anybody care to shed some light on rent prices?

Living in Centurion, you also won't get a decent 3-bed place for under 8 to 10k, and that's only townhouses. That's my experience from looking recently though.

I was looking at local rental options last week, a single room is between R 2,700 and R 5,500 per month. There are slightly cheaper options if you don't mind living in a room the size of a pantry.

A quick look on Gumtree has the following:

4 bedroom R 29,000 per month
3 bedroom R 10,300
4 bedroom R 20,000
2 bedroom R 10,500
4 bedroom R 20,000
1 bedroom R 8,000