A shortage in Cape Town rental properties has allowed landlords to increase rent by double-digit percentages, the Sunday Times reported.
The reason for the shortage is that more investors are renting out their properties in the City Bowl and the surrounding area for shorter stays, using the online hospitality platform Airbnb.
PayProp CEO Louw Liebenberg told the newspaper that the growth of Airbnb and the promise of higher returns has motivated owners to remove their properties from the long-term rental market.
Liebenberg said they have also seen a “big move” of tenants from Johannesburg and Pretoria to Cape Town and the Cape Winelands region.
This has led to a surge in demand, particularly in the R15,000+ per month bracket.
He warned that although the Western Cape rental market will continue to outperform other regions over the next year, tenants would not be able to absorb rental increases indefinitely.
The full report is available in the Sunday Times of 19 February 2017.