Cape Town's popularity contributing to high property rental prices, says UCT professor
The city has won a few titles recently, which have all centred around it being one of the best cities in the world.
City centre of Cape Town, Table Mountain. Wikimedia Commons/Discott
CAPE TOWN - The city of Cape Town’s popularity is contributing to high property rental prices.
That’s according to Professor Allan Davids from UCT’s Financial Innovation Hub.
The city has won a few titles recently, which have all centred around it being one of the best cities in the world.
Davids said this has seemingly led to an increase in rental costs.
"Cape Town, as you know, really struggles with housing supply. We have a beautiful city with a beautiful mountain located in the middle of it, but that certainly limits the extent to which we’re able to build property.
"This isn't a new challenge that we face in the city, it's something that’s always been there, but what has started to create a sort of increased demand for property in Cape Town is Cape Town’s outperformance relative to the rest of the country."
He added that capping rent prices could fix the issue now, but long-term solutions were needed.
"Rent control is an idea that's been touted a lot recently. It's an idea that's been touted in fact by many countries over the course of history and this is sort of one type of experiment of policy intervention where I'd say the academic literature is unanimous. So, to summarise, rent control has many short-term benefits, these are often outweighed by longer-term costs."