Reprinted from Daily Maverick, by Rebecca Davis – 2024-12-04
We recently wrote about the tension between the benefits and drawbacks of short-term rentals such as Airbnb listings in the Cape Town rental market, where locals often have difficulty finding affordable rental accommodation. This article from the Daily Maverick shows there is another factor putting pressure on the market.
Want to get tempers rising fast in Cape Town these days? Bring up the topic of digital nomads.
‘Hey, I work for a tech company,” began a Reddit entry from August 2024.
The author of the post, apparently American, proceeded to explain that he was considering moving his family to Cape Town.
“What sort of lifestyle is achievable with $200,000 [R3.6-million] to $300,000 [R5.4-million] a year? We have two children both primary school age and are aware of safety concerns.”
Not to worry, wrote back an apparently British digital nomad based in Cape Town.
“My 14-year-old would bus and train everywhere in London, he Ubers a lot here but it’s completely fine for him on his own if he’s streetwise. With the kind of money you’re on you can afford a driver for the kids anyway!”
Show this exchange to the average Capetonian these days, and chances are high that you will be met with something close to xenophobic rage.
Digital nomads – mostly young foreign professionals in tech, finance, media or insurance, who stay in Cape Town for months at a time working remotely – have become arguably the most hot-button issue of the moment.
John Maytham, host of the Afternoon Drive show on Cape Town’s most popular talk radio station, Cape Talk, says it is a topic which has the studio switchboards lighting up like a Christmas tree.
“I would say around 80% of the public reaction I get on this subject is negative,” Maytham told Daily Maverick.
From the perspective of the politicians at the City of Cape Town, this is an absolute no-brainer. Digital nomads already have jobs, so they don’t need employment here; they arrive with deep pockets and spend lavishly on food, entertainment and accommodation, pumping money into the local economy.
What’s the problem?
Log on to practically any social media platform and you will hear Capetonians arguing one case in particular: that digital nomads are disrupting the local markets through the weight of their (largely) Western currencies, driving restaurant and accommodation prices to levels completely unaffordable to locals.
“My mom was born and raised in Cape Town,” says Tiktokker Azee Green in a video viewed tens of thousands of times.
“I was born and raised in Cape Town, and I probably will never move out of home unless I live with someone else. I cannot afford to compete against the euro and the pound and the dollar.”
Tiktokker Jaxx-Amahle put things more bluntly in a video in late November.
“I suggest you heed this call and you listen closely: what is happening in Cape Town is unsustainable,” she tells the camera.
“That little Utopia is going to combust. And granted, at this stage, it is black and brown people who can’t afford to live in the city so no one cares – but white South Africans, you are next, I promise you. Because the rand is the rand is the rand. It’s not the euro and it’s not the dollar. And you will also be outpriced living in that city.”
One of the complicating issues is just how little data there is on this matter. In fact, there’s none.
The City of Cape Town admits that it does not know how many digital nomads are living and working in Cape Town.
Alderman James Vos pointed Daily Maverick to the Cape Town Digital Nomads Facebook group, which he said had 4,800 members. In fact, it has almost 17,000 members – but this is an obviously unreliable metric, since some members appear to be locals, and naturally not every digital nomad will be a member of the group.
Vos’s point was, however, that the number of members on the group paled in comparison with the Facebook groups for other digital nomad hotspots, like Lisbon, Bali and Medellin in Colombia.
It is highly likely that Cape Town attracts far fewer digital nomads than some of its international counterparts in safer locations. Indeed, on the website Nomads.com, which ranks destinations for digital nomads based on public feedback, Cape Town is listed at only number 36 – lower even than Lagos (31), apparently because Lagos is perceived as safer.
Daily Maverick canvassed co-working spaces around Cape Town, popular for use as offices by digital nomads, as to what proportion of their members they estimated to be foreign nationals.
The year-round average is 10-15%, said Cape Town Office; about 10%, reported Cube Workspace. A “significant portion”, estimated Workshop17.
The implementation of the South African government’s remote work visa – introduced by Home Affairs in May, just before the elections, after lobbying from the Western Cape government since 2021 – should mean that in future there will be some nomad numbers available.
Daily Maverick’s questions to Home Affairs regarding the take-up of the remote work visa went unanswered via email and WhatsApp for a week.
The new visa allows digital nomads to stay in South Africa for up to three years. Crucially, if they are spending more than six months here in a year, they need to register with SARS to pay tax.
This could go some way towards mollifying public resentment since one of the major current critiques of digital nomads is that they benefit from South African public services and spaces (roads, beaches and so on) for months on end without paying tax beyond VAT.
The question is whether digital nomads will bother to secure a remote work visa – when under the current system it is perfectly possible for them to stay in South Africa for long periods without one.
On forums like Reddit, one of the selling points of Cape Town as a digital nomad destination is how easy it is to live there indefinitely after initially entering on a 90-day tourist permit.
“You can practically stay here forever without being a resident,” one poster enthused.
“Come into the country, extend [your tourist visa] for another 3 months to 6 months. After 6 months you take a vacation and come back. Just repeat.”
Many nomads do what they term a “border run” or a “visa run”, instead of extending their tourist visa.
Amy, a Canadian digital nomad, explained the system in a 2023 YouTube video.
“Another way to get around this visa extension [issue] is by doing a visa run, which is what I did. In order to do a visa run you need to go to a non-neighbouring country for an unspecified amount of time,” she said.
Amy ended up taking a holiday in Zanzibar for two weeks.
“There aren’t any hard rules about how long you should be gone. However, if you’re only gone for about three or four days, and then you come back and try to get a fresh visa, they might only give you a week or two weeks because they think you’re just trying to do a visa run.”
To work in South Africa, even remotely, without a work permit is technically illegal.
Online, nomads swap tips: “Yes you can simply come to SA on a tourist visa and work from there. Nobody cares. Just tell the immigration officer you’re there for tourism.”
Are digital nomads skewing Cape Town’s rental market?
It depends on who you ask.
Neil Viljoen, a ReMax estate agent working largely in the City Bowl and Atlantic Seaboard areas, says the arrival of digital nomads has been a “massive player in the market”.
Viljoen said that many Cape Town-based property agencies now target digital nomads in their advertising.
“We have people coming for three, four, five months at a time and they pay good money. For a one bedroom, they’ll pay R25,000-R30,000 a month.”
Online, a common refrain from digital nomads is that Cape Town allows them to live “a 5-star lifestyle on a 3-star budget”: 3-star by Western standards.
Dutch vlogger Chris Schaap explained in a 2022 video: “You really have two options: you either stay in the City Bowl, or near the ocean”.
Showing viewers his 65 square-metre one-bedroomed apartment, Schaap said: “For an entire month, I pay around €1,600 [R30,451]. I think this is incredible value for money if you compare this to a short stay anywhere in Europe or North America”.
For locals, the Cape Town rental market in the central and coastal suburbs is eye-wateringly expensive; the median Western Cape salary in 2022, the most recent year for which Stats SA has released data, was R5,500 a month.
Of late the rental stock has also been shrinking due to the high number of properties being used either for short stays or for AirBnBs: as has been widely reported, Cape Town now has more AirBnB listings than cities like Florence, Berlin and Barcelona.
Alderman Vos strenuously defended Cape Town’s mushrooming short-term rental industry to Daily Maverick, saying that AirBnB “supported almost 50,000 jobs and contributed more than R23.5-billion to the South African economy in 2022”.
This year, videos on social media have shown hundreds of Capetonians queuing to view a single rental property, while stories abound about locals being outbid for rentals by foreigners who can offer six months’ rent or more upfront.
“It’s a symptom of a broader issue,” Ndifuna Ukwazi’s Jonty Cogger told Daily Maverick: the prioritisation of the luxury residential market, which caters for less than 10% of Capetonians.
Thus far, the City of Cape Town has shown no appetite to introduce regulation to cap rents – though Cogger points out that this would not be unprecedented for the city. He says that during apartheid, suburbs like Thornton had rent control for white tenants.
Cogger acknowledges that the question of “how much [government should be] willing to get involved in property markets” is a vexed one, due to the concern of dissuading investment. But foreign investors are themselves a disruptive force in the Cape Town property market.
“These developments keep going up and it’s fair to assume that they’re being bought up in batches by foreign investors.”
Alexa Horne, managing director of DG Properties, says the two major factors driving the Western Cape property boom are international investors and domestic semigration.
“These are primarily South African professionals and international investors seeking lifestyle and economic opportunities, not necessarily foreign digital nomads,” Horne told Daily Maverick.
She said the primary influences on Cape Town’s steep property prices were the sense of economic stability brought by the GNU, the reductions in load shedding, interest rate cuts and the city’s lifestyle appeal.
“Digital nomads might contribute marginally to rental demand, but they’re not the primary catalyst for our property price increases. They’re a visible trend, but not the fundamental economic driver many assume them to be.”
Yet that doesn’t stop them being scapegoated.
A report in Vox about digital nomads in Mexico City offers a revealing clue as to why:
Many residents acknowledge that it’s unproductive to blame foreigners for structural issues like housing, but they often have no other outlet for their frustration. As one Mexican blogger put it, “I feel like I can’t do anything directly against the housing bubble, but at least I can get some sort of satisfaction out of taking it out on what I’ve appointed as one of its representatives.”
“Digital nomads, go home!”
These stickers can be found around Mexico City: just one of the global spots where hostility towards digital nomads has been rising steadily over the past few years.
One digital nomad based in the Canary Islands received over 400 “bullying” messages from locals, calling her a “coloniser” after she posted a video online about one of her co-working ventures.
There are many places worse hit by the impact of remote workers than Cape Town. Costa Rica has seen sleepy beach spots rendered unaffordable to families who have spent annual holidays there for generations.
In digital nomad communities, there are certain ways of digital nomading considered more socially responsible than others. Some maintain that it is more ethical to stay in a hotel than in a residential property; others believe that it is incumbent on digital nomads to get involved in volunteer activities for NGOs in their host cities.
On Reddit, one common bit of advice nomads share is to avoid identifying themselves as digital nomads due to the growing antipathy.
Doubtless as a result of this rancour, Daily Maverick found it very difficult to persuade digital nomads in Cape Town to speak to us, despite reaching out to both individuals and online nomad groups.
The sole individual willing to talk to us asked to be identified only as Taylor from Toronto, who works remotely in logistics and who is currently undertaking her third three-month stint in Cape Town.
“Cape Town has blown up this year on the digital nomad scene, I think because the electricity problems were brought under control,” Taylor told Daily Maverick.
“Before then, it was the one thing you would hear all the time: South Africa is so beautiful and so affordable, but the electricity issues make it not that great for remote working. Now it’s like that roadblock is out of the way.”
She said the general consensus was, however, that Cape Town was less desirable as a digital nomad destination than places like Bali and Thailand because of the safety issue, particularly for female travellers.
Taylor was aware of the negative image of digital nomads in places like Spain and Portugal, but said that she hadn’t experienced any personal hostility in Cape Town.
“In practice I find that people in Cape Town are extremely friendly,” she said. DM
For further information
If you are a property owner, Airbnb host, or tenant with any questions on rental housing legislation or landlord–tenant relations, contact one of our eviction attorneys on 086 099 5146 or simon@sdlaw.co.za. Simon Dippenaar & Associates, Inc. is a law firm of specialist eviction lawyers in Cape Town, Johannesburg and Durban working hard to help landlords and tenants maintain healthy working relationships.
