Is Cape Town As A Destination Getting Too Expensive?
Let’s see what the Deutsche Bank, Cape Town homeowners and one enquiring client thinks.
Lets start with the client:
He wanted 14 nights accommodation at R7000 per night for December (he had very strict guidelines on views, private pool and no apartments). Yesterday, after days of sending about 97 emails, he responded:
I think, because it’s early (May) in the year people are holding out for high rates? We’ll leave it for a month or two and see what happens. Or, we’ll go to Bali for 1/4 of the price! Holidaymaker
This kind client tells me he is early.
Is he really early?
No. He is late.
I asked 40 homeowners and Cape Town agents representing very many homes if they had availability for this client.
Here’s one of the many “we are full” responses I got from accommodation owners:
Obviously there is a lot of accommodation left but the choices are not as great as we approach high peak December.
Let’s see if Deutsche Bank can tell us if Cape Town is expensive:
Deutsche Bank did a study they call, “The Random Walk: Mapping The World’s Prices 2015“. I picked it up in today’s Die Burger.
These guys did not show the cost of self-catering accommodation, but they compared other costs.
For example, what is the cost of a weekend away?
Sydney is the most expensive at $2164 more than twice Cape Town’s rate ($1050) and three times Johannesburg rate ($718). Cape Town is a littles less than New York ($1180). London is a whopping $1749 for a weekend away.
Let’s look at a few others:
- A Big Mac burger in Cape Town is less than half what you’ll pay in New York. One of the cheapest in the world.
- It’s only India and China that’s cheaper in car rental than South Africa. At $40 per day it’s less than half the rate you’ll pay in New York.
- When it comes to 5 Star hotels you’ll have to bring the big bucks; Cape Town’s luxury hotels are $413 per night, or $33 per night more than New York. India, Canada and Japan are in the region of $200. Johannesburg is 25% less than Cape Town.
- If you enjoy a beer then Cape Town is one of the cheapest.
What about all the celebrities visiting Cape Town:
Actor, Ryan Reynolds told the Mail & Guardian,
“Going to a place like Cape Town certainly evolves you, because it’s a completely polarised experience from the typical movie location. [It] reminds me a little of the warmth I feel when I’m in Vancouver, my home town in Canada, but I was just gobsmacked by how beautiful Cape Town is and how beautiful the people are.”
Elon Musk and friend Larry Page (Google) visited Cape Town recently, according to Musk’s dad (Rapport 17 May 2015).
Cape Town is tops on every popularity list.
Cape Town was listed as the number one on the prestigious New York Times’ 52 Places to go in 2014 list. And there are many more.
There is just not enough self catering accommodation during peak!
The clever and boring financial guys call it supply and demand.
During sumer, self-catering owners demand a rate equal to 14 nights. And they can. You can stay for less but you pay for 14 nights.
Is this arrogant?
In a market where there are not enough homes to satisfy the demand, you’ll be stupid if you sold less than ten days.
Is Cape Town too expensive?
I don’t think so.
Instead, it’s very popular.
Cape Town may be too expensive for many South Africans. It’s not yet too expensive for the dollar and pound world. (And as the rand devaluates against the major currencies it should absorb increases).
Getting back to my client, who said he’ll wait a few months and then enquire again:
I have some bad news for him. You will still get accommodation but don’t think you can wait. Many places get booked more than 12 months in advance. And your very strict criteria at 6 months before your arrival made it impossible.
On going to Bali at 1/4 of the price:
One agent said to me:
Well then best go back to Bali, its somewhat different there!!!!!!!
People are gobsmacked by Cape Town.
Book early. There are bargains. There are beautiful homes. The longer you wait the more difficult it becomes to find the ideal home. And if you cannot beat the Cape Townians then join them and buy property in Cape Town.