While this sector is vital for the growing Cape tourist economy and these properties offer lucrative returns for owners, it has come under increasing scrutiny amid a shortage of affordable rental accommodation in certain areas across the City.
This has led to calls for regulation with two new proposed regulations in the pipeline that property owners, landlords and potential rental investors need to be aware of.
New Regulations for Short-Term and Airbnb Rentals
The first is the City of Cape Town STR By-law. The City of Cape Town has introduced a proposed 2026 Short-Term Letting By-law aimed at regulating residential properties used for short-term rentals. It is currently in the draft stage. This will effectively result in those operating primarily as businesses having to pay commercial property rates which could mean a cost increase of up to 135%. This could involve additional administration, and the higher cost could impact rental rates as it will be an additional property cost to contend with.
The second is Department of Tourism STR Draft Code (Code of Good Practice for Short-Term Rentals). This was gazetted on the 13th of March 2026. This interim framework requires hosts to act in good faith by informing guests of municipal bylaws and body corporate rules regarding noise or parking, while mandating that online platforms provide guest identity data to hosts to enhance security.
These regulations suggest a move towards greater oversight. Investors will be required to align more closely with formal hospitality standards and local bylaws which will add to the administrative burden and costs of compliance. This may also potentially involve added administration and costs.
Outlook for Short-term/Airbnb Rentals and Investments Remains Positive
On the upside, tourism remains a significant growth sector for the Cape and overall economy. It is a growing sector with the international airport recording a record-breaking 11.1 million two-way passengers in 2025, reflecting a 7% increase in both domestic (7.8 million) and international (3.3 million) travellers compared to 2024.
Most short-term rentals/Airbnb properties see strong occupancy rates during peak periods, especially in the False Bay areas over the tourist periods. These properties therefore remain in high demand. There is also always the option of taking on long-term tenants should the need arise.
Seeff offers a comprehensive rental service with skilled area specialists who provide unique insights into local markets to offer the best guidance and rental solution to property owners, landlords and investors.
We are currently seeing a favourable market for property sellers and landlords, so please feel free to contact Seeff False Bay to discuss your needs. Our experienced local area agents stand ready to open the door to your next property move.
