Are Digital Nomads Out Pricing Rentals for Cape Town Locals?

Cape Town’s rental crisis has sparked a heated debate, with digital nomads a growing group of remote working foreigners caught in the crossfire. Many locals argue these professionals, often earning in stronger currencies like dollars, euros, and pounds, are driving up living costs and displacing residents in a city already grappling with inequality.

A Lifestyle Out of Reach for Locals

The debate came to life in a Reddit post from August 2024. An American professional, earning between $200,000 and $300,000 annually, asked for advice on moving to Cape Town. A British digital nomad reassured him that his income would provide a luxurious lifestyle, including private drivers for his children.

For locals, this exchange is emblematic of the problem: foreigners living comfortably in Cape Town while many residents struggle to afford basic housing. TikTok creators like Azee Green and Jaxx-Amahle have voiced frustration, with the latter warning that the current trend is unsustainable and that rising costs will soon price even middle-class South Africans out of the city.

The Impact of Digital Nomads on Housing

Estate agents in Cape Town confirm that digital nomads are reshaping the rental market. Neil Viljoen, a ReMax agent specializing in the City Bowl and Atlantic Seaboard, says digital nomads are willing to pay R25,000 to R30,000 per month for a one-bedroom apartment. Many locals, by comparison, earn a median salary of just R5,500 a month, according to 2022 data.

The growing number of properties listed as Airbnbs or short-term rentals exacerbates the problem. Cape Town now has more Airbnb listings than cities like Florence or Berlin. These properties are often marketed to tourists and digital nomads, shrinking the pool of affordable, long-term housing for residents.

The City of Cape Town defends the short-term rental market, pointing to its economic benefits. In 2022, Airbnb reportedly contributed R23.5 billion to South Africa’s economy and supported nearly 50,000 jobs. However, critics argue this comes at the expense of locals who are being priced out of their communities.

The Numbers Game

The true scale of the digital nomad phenomenon in Cape Town is unclear. The city has no official data on how many remote workers live there. Alderman James Vos referenced the Cape Town Digital Nomads Facebook group, which has 17,000 members, but this figure is hardly definitive. Co-working spaces report that 10-15% of their users are foreigners, but the actual number of digital nomads likely fluctuates throughout the year.

The South African government introduced a remote work visa in May 2024, allowing digital nomads to stay for up to three years, provided they register with SARS and pay tax if they remain in the country for more than six months. However, many nomads bypass formal permits by entering on tourist visas and using loopholes like “visa runs” to neighboring countries.

A Growing Divide

For locals, the rental market’s transformation underscores a broader issue: the prioritization of wealthier, often foreign residents at the expense of Cape Town’s own population. Housing activists like Jonty Cogger of Ndifuna Ukwazi argue that the city is catering to a luxury market that serves less than 10% of Capetonians. Meanwhile, long queues to view rental properties and reports of locals being outbid by foreigners willing to pay months of rent upfront have become increasingly common.

The lack of regulation on rents has drawn criticism, though the City of Cape Town has shown little appetite for intervention. Cogger points out that rent control existed in some neighborhoods during apartheid and suggests similar measures could alleviate the current crisis.

Critics warn against placing all the blame on digital nomads, arguing that they are a visible symptom of deeper structural problems. International investors and domestic migration from other provinces also drive up property prices. As Alexa Horne of DG Properties notes, “Digital nomads are not the primary catalyst for our property price increases. They’re part of the trend, but not the fundamental cause.”

However, the frustration is real. In other digital nomad hotspots like Mexico City and Costa Rica, similar tensions have arisen, with locals accusing remote workers of transforming their cities into unaffordable enclaves. In Cape Town, the anger is compounded by the stark inequality that has defined the city for decades.

As Cape Town continues to attract digital nomads, the city must balance the economic benefits they bring with the social costs of rising inequality. Policies to regulate short-term rentals, encourage affordable housing development, and enforce remote work visa requirements could help ease tensions. For now, the debate remains deeply polarizing, reflecting broader anxieties about who gets to call Cape Town home.