Cape Town holiday rentals testing new highs
Demand for short-term holiday rentals in Cape Town and surrounds seems to be on the rebound following the partial lifting of water restrictions
As Cape Town approaches its peak tourist season, property owners are wasting no time trying to cash in on what industry players expect will be a far more buoyant holiday rental market than last year. Estate agents have reported a rush of inquiries from local homeowners looking to let their properties to holidaymakers over the coming festive season.
While the bulk of Cape Town’s holiday rentals are priced at R10,000-R30,000 a night, trophy homes in posh Atlantic seaboard suburbs are testing new highs. A number on the market have staggering price tags that exceed R100,000 a night. And, surprising as it may seem, some of these uber-luxury rental abodes have already been let. For instance, two high-end homes on Clifton’s most expensive street, Nettleton Road, recently fetched R110,000 and R130,000 a night each through Dogon Group Properties.
Company CEO Denise Dogon says that without a doubt there has been a resurgence in demand for holiday rentals. "The rainfall we have had in Cape Town seems to be bringing life back to our tourism sector, [after] the drought affected the rental market and tourists chose other destinations. They now seem to be returning, and we are expecting a much better festive season than last year."
Dogon adds that the weakening in the rand this year is also likely to lure foreigners back to SA’s shores, given the increased value for money on offer.
Though there is interest for upper-end properties with all the bells and whistles, she says most booking inquiries from foreigners are for homes priced at R20,000-R30,000 a day.
The Atlantic seaboard is still the preferred area for overseas holidaymakers, but Dogon says Constantia has also become popular for holiday lets, especially with families from the UK.
The rainfall we have had in Cape Town seems to be bringing life back to our tourism sectorDenise Dogon
Pam Golding Properties and Seeff — both of which have a number of Atlantic seaboard homes to let during the peak period at R60,000-R190,000 a day — are also expecting an improved holiday letting season.
Pam Golding’s rental manager for the Cape region, Dexter Leite, says there has been a noticeable shift in the rental market in recent weeks. "Holiday rental inquiries from both domestic and international visitors have increased significantly, and holiday lets are rapidly filling up," he says.
The company has just signed a three-month holiday rental for a luxury home in Constantia for a total of R540,000.
Natalie Muller, sales and rentals manager for Seeff Atlantic seaboard, confirms that holiday rentals are in full swing. That’s unlike last year, she says, when many holidaymakers cancelled their plans to come to the Mother City because of the water crisis.
While the Atlantic seaboard tends to attract the big spenders, who are prepared to pay R50,000-R250,000 a night for an opulent, five-star home-away-from-home experience, Muller says apartments are still available at rates of R2,500-R10,000 a night and luxury villas at an average R20,000-R30,000 a night.
Cape Town homeowners who rent out their properties via Airbnb are also likely to experience an improved letting season. However, anecdotal evidence suggests that many have withdrawn their units from Airbnb, opting instead for a more hassle-free placement through a rental agent.
Pam Golding rental agent for the Atlantic seaboard, Janine Sullivan, says there has been an uptick in inquiries from Capetonians looking to use a full-service rental management offering rather than managing their own properties. She believes the trend has been driven by property owners looking for greater peace of mind by having an experienced agent deal with challenges that may arise during the holiday letting period.
What it means
Industry players mostly blame the Western Cape drought for the decline in tourism to SA earlier this year
Sullivan agrees that demand for holiday rentals in Cape Town and its surrounds has been boosted by more relaxed water usage restrictions and the fact that fears about water scarcity have subsided. She says that at the recent World Travel Market in London, the Western Cape department of economic development & tourism went some way towards reassuring tourists that Cape Town is open for business and a desirable place to visit. "So we are confident that the rental market will reflect this renewed interest in the Mother City," she says.
Meanwhile, the latest figures from Stats SA show that the number of overseas visitors to SA from January to August dropped by 1.3% (year on year). Arrivals from Europe — traditionally SA’s biggest source of overseas tourists — were down 2.2% over the same period. That’s in stark contrast to the growth of 7.2% in overseas visitors recorded last year.
Industry players primarily blame the Western Cape drought for this year’s decline, so it will be interesting to see the extent of the expected offshore tourist revival when Stats SA releases its tourism figures for the coming summer months next year.