00:00How has the rise in these short-term rentals affected Cape Town's housing market as a whole?
00:06Yeah, Giovanna, it's interesting because if you take a look at Cape Town, it is in comparison to
00:11a number of other major cities about this issue of access and affordability. So if we zoom into
00:17Cape Town specifically, on the one hand, there is this issue of the rise of short-term stays
00:22that is contributing to the decline in inventory of some of these longer-term permanent housing.
00:28And we've seen that over the past few years. We've seen that globally with a number of major cities.
00:33But what's happening in Cape Town specifically, the decline in some of these, the longer-term
00:38rental market then means that there's less affordability options than for locals. Not
00:45only that, but a number of locals are just being priced out altogether from the city as a whole.
00:51There's also this added element of foreigners who are really lured to, I mean, these pictures
00:57don't do Cape Town. I think the amount of justice that it does, but foreigners who are really lured
01:03to the beauty of the city and in comparison to a number of the cities that they are probably coming
01:09from are really, it's cheap relative to where they're coming from. So that's also driving up
01:14the prices. So all of this has contributed to what has been about a 30% rise in prices over the five
01:21years leading up to March of 2024. So as you mentioned there, it has caused a bit of resentment
01:26with locals. But as we're hearing from the mayor, he's trying to at least tackle it in some similar
01:31ways that we've seen in other cities globally.
01:35Okay. So what is the mayor trying to do, Jen, to bring these prices under control?
01:41Right. Well, it's interesting. If you look at Airbnb and Booking.com and compare Cape Town to some of the
01:47other cities, some of our Bloomberg reporting actually shows that Cape Town listings had more
01:51than double the amount of listings than that of Amsterdam, Barcelona, New York City, and Hong Kong.
01:58We actually found that dedicated rentals listed on Airbnb accounted for just under 1% of formal
02:04housing units in Cape Town based on 2024 there. And so what Mayor Hill is trying to do is something
02:11similar to what we saw in New York City, and that's essentially put an additional tax for short-term
02:16rentals increasing by about 135%. That is in rate in the RAND terms or cents per RAND relative to the
02:25property market value. And he also wants to really try to enforce property tax liabilities and ensure
02:32that those who are staying there are either staying there for longer periods of time. And if they are,
02:38then they are enforcing and actually abiding by the tax liabilities of the city. We've seen something
02:45similar in New York City. We've also seen something similar in London. Barcelona down the line is also
02:52looking to this. But this is just really one step, right? The mayor then, and mayors globally then still
02:59have to deal with this issue of supply and also affordability for the locals.
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