What is going on with the Cape Town Holiday Rental Market?
You know about Brexit, stronger rand, local elections, and winter.
Let’s discuss how these may impact the rental market and what you should consider.
Before the elections, many people enquired but few committed. And we wanted to know why?
The graph below shows Google search volumes for “Cape Town accommodation” over a few years until today.
Interest does not bank money, commitment does. With the local elections very few committed and it was not easy for many owners but then things changed abruptly. More below…
Your holiday rental home may sell for R14000 per day at say 14 nights minimum over peak.Today he is paying £12352 pounds for the same home at the same R14000 times 14 nights.Or, in other words, your home is now R31484 more.
And the Euro down from R18.4 to R15.
But it’s not all bad news.
Cape Town Tourism CEO Enver Duminy said in response to the Brexit decision, the rand/pound exchange rates “still makes SA a highly favourable prospect for international visitors as it means affordable luxury”.
Cape Town gets mentioned on various internationally renowned websites as a value for money destination like this Huffington Post list.
The Local Elections:
We experience three winter months well below par compared to other winter seasons.
We have rented out more homes in the last two weeks than in May, June, July combined.
“We would caution against tourism businesses raising their prices to gain from international visitors only to price locals out of the market, especially since locals may opt to travel domestically within SA as a result of unsteady exchange rates,” Duminy says (Cape Town Tourism CEO Enver Duminy).
On accommodation rates, Michael Farr from Sun International was asked if 5-star hotels in South Africa can still survive in an over supplied market. He said:
The fear is unfounded as long as rates are set at what local clients can afford.
You know what rates you expect to get per day. Consider the above advice if in doubt make sure your rates are what the locals can afford.
The Horak Clan at CapeHolidays hopes to bring you regular paying guests soon.