South Africa is edging toward a fundamental shift in how short term accommodation operates, with national authorities finalising a regulatory framework that could redefine Airbnb’s role in major urban centres. At the heart of the proposed changes is an effort to pull platforms like Airbnb into the formal tourism sector, subjecting them to oversight similar to that applied to hotels, guesthouses, and hostels.
The policy process, underway since at least 2023, reflects growing concern within government that unregulated short term rentals have outpaced existing laws. Officials are now seeking to balance innovation in tourism with housing stability, signalling a more interventionist approach that would formalise an industry that has largely operated in regulatory grey areas.
Property Industry Warns Of Investment Market Shock
Andrew Schaefer, managing director of property management firm Trafalgar, has warned that the new framework could have far reaching consequences for buy to let investors. According to Schaefer, the regulations may alter the risk and return profile that has made short term rentals so attractive, particularly in high demand coastal and city locations.
The new regulations will reshape the buy to let investment landscape and the broader residential letting market
He argues that compliance costs, administrative burdens, and operational limits could push some investors to rethink their strategies, especially those whose portfolios are heavily dependent on short term tourist income rather than stable long term tenancies.
Proposed Rules Mirror Hotel And Guesthouse Standards
The draft policy is expected to introduce mandatory registration with tourism authorities, enforce hospitality related taxes, and impose stricter health and safety standards on short term rental properties. These measures are designed to create parity between Airbnb hosts and traditional accommodation providers, many of whom have long complained about uneven regulation.
For homeowners who rely on short term rentals to supplement income, this could translate into increased paperwork and higher operating costs. Smaller operators, in particular, may find compliance challenging, potentially accelerating consolidation in the market or forcing casual hosts to exit altogether.
Rental Day Caps Could Reshape Urban Housing Supply
Among the most contentious measures under consideration is a cap on the number of days a property may be rented out annually on short term platforms. Similar policies in international cities have aimed to discourage full time Airbnb operations and redirect properties back into the long term rental pool.
In the South African context, such a cap would be a significant intervention, especially in cities where housing shortages are acute. By limiting year round short term letting, policymakers hope to ease pressure on residential supply, although critics warn that enforcement will be complex and resource intensive.
Cape Town At The Centre Of The Storm
Cape Town has emerged as the focal point of the debate due to its popularity with tourists and investors alike. The city attracts millions of visitors annually, creating strong incentives for property owners to prioritise short term rentals over longer leases to residents.
Independent data platform Inside Airbnb has highlighted the scale of the imbalance, counting more than 23,000 active Airbnb listings across Cape Town. By contrast, the supply of long term rental stock in central areas remains severely constrained, intensifying competition and driving up prices for local tenants.
| Market Indicator | Figure |
|---|---|
| Active Airbnb Listings In Cape Town | Over 23000 |
| Long Term Rentals In Central Cape Town | Approximately 700 |
| Shared Room Monthly Rent | From R4500 |
| Studio Apartment Monthly Rent | From R5000 |
| Airbnb Daily Rate Range | R950 To R20000 |
Housing Activists Raise Alarm Over Affordability
Housing advocacy groups argue that the dominance of Airbnb has made it increasingly difficult for residents to secure affordable accommodation. Long term rental prices in Cape Town already outpace those in many other South African cities, placing additional strain on households.
A single room in a shared house now starts at approximately R4500 per month, while even the smallest studio or bachelor apartments are priced from R5000 per month
Schaefer has contrasted these figures with the earning potential of short term rentals, noting that properties in premium areas such as the Atlantic Seaboard can generate daily rates far exceeding monthly residential rents, reinforcing investor preference for tourism driven models.
Global Cities Offer A Regulatory Precedent
South Africa is not alone in grappling with the unintended consequences of short term rental platforms. Cities including Amsterdam, Barcelona, Berlin, London, New York, Rome, San Francisco, and Vienna have all imposed restrictions or outright bans in certain zones to protect residential housing stock.
Barcelona, in particular, has taken an aggressive stance, fining illegal listings and enforcing strict rules to prevent entire neighbourhoods from becoming tourist enclaves. These international examples are increasingly cited by local policymakers as evidence that regulation can rebalance housing markets.
Winners And Losers In A Changing Tourism Economy
If similar rules are adopted locally, Airbnb hosts in Cape Town and other tourist hubs may be forced to adapt. Some are likely to transition back to long term rentals, while others may leave the market, potentially increasing housing supply for residents.
This shift could benefit local tenants by increasing the supply of available housing and stabilising rental prices
However, Schaefer has cautioned that reduced Airbnb availability could also reshape tourism economics, with higher accommodation costs for visitors and a renewed dominance of hotels. As the final regulations approach, investors, tenants, and travellers alike are bracing for a recalibration of South Africa’s urban housing and tourism landscape.
