Cape Town’s spiralling housing costs: Should there be a punitive tax on foreign investment?

CapeTalk’s John Maytham interviews Pete Ahmad, an Independent Urban Planning Consultant, to unpack the big questions around affordability, access, and the future of housing in Cape Town.

Listen below:

The cost of housing in Cape Town is spiralling, especially in and around the city centre.

Complex factors are driving increasing prices, from rising construction costs to challenges specific to the Mother City, such as semigration, limited supply, and zoning complexities.

Gentrification in neighbourhoods such as the Bo-Kaap, and increased popularity among foreign investors and digital nomads are also driving up property prices.

RELATED: ‘We’re bringing social housing to the centre of the city’ - Alan Winde, WC Premier

Did you know (according to Claus Rabe of the City of Cape Town):

• The number of flats built each year in Cape Town has risen by 140% since 2012.
• Real prices (after adjusting for inflation) for flats in Cape Town have risen by 30% over this period.

"The cost of buying a property in Cape Town is so unaffordable that one has to Airbnb it out just to afford a bond. There is nothing prohibiting foreigners from buying with hard currency… there is no protection… I’d suggest a tariff on purchasing Cape Town property, and possibly a surcharge on rates."

- Mark, listener

Ahmad explains why the housing crisis is so acute in Cape Town, and comments on the suggestion made by listener Mark.

"The migration trends to the Western Cape from the Eastern Cape and Gauteng, it’s no wonder that we see prices compounding. We’re seeing increases in construction materials…"

- Pete Ahmad, Independent Urban Planning Consultant

"A punitive tax on foreign investment… if we go this route, what are the unintended consequences? I understand why it’s attractive…"

- Pete Ahmad, Independent Urban Planning Consultant

Scroll up to the audio player to listen to the interview.