AirBnB not to blame for high house prices in CT

Reason is migration – property experts

Rental property viewings with 20 or more people present‚ and with many more applying‚ are commonplace in and around the Cape Town CBD.

But what is causing these mostly “established young professionals”‚ in search of the “live‚ work‚ play‚” lifestyle to have to fight over accommodation? Many have pointed the finger at AirBnB‚ which has 18 000 active listings in the city.

But property experts do not believe the online lodging service is the main driver for the high prices and low supply of affordable rental spaces.

Property economist Erwin Rode said even though AirBnB was growing‚ it competed with hotels and guesthouses more than home owners looking to rent their properties.

“I don’t expect [there is] any effect that AirBnB could have had on [rental property] prices in general. AirBnB is a different market. It’s a completely different business to the man on the street looking to rent a house or home [long term]‚” said Rode.

Rode said the main drivers behind the pricing and shortage of rentals were regional migration and traffic congestion.

People migrating from elsewhere in the country to live and work in Cape Town contributed to the high demand for rental properties‚ and people were prepared to pay more to live closer to work and avoid commutes.

Cape Town is the most congested city in the country as well as the fastest growing.

In 2015 the population grew by nearly 10% to 3.7 million and that is expected to increase to 3.9 million by 2020.

A rentals manager at property company Pam Golding‚ Dexter Leite‚ agreed with Rode and said that they were finding an average increase in rentals of about 8% year-on-year‚ which was “not unusual”.

AirBnB manager Velma Corcoran said the typical host in Cape Town earned R36 700 a year by sharing space in their home for 23 nights.