International property buyers spent over R1 billion in Cape Town in five months (ooba)

While skyrocketing property prices in particularly central areas of Cape Town are delivering returns for the City, locals are virtually being priced out of the market.

In the first five months of 2025 alone, international homebuyers spent over R1 billion in Cape Town, according to ooba Home Loans.

These statistics reaffirm the city’s dominance as both South Africa’s most active housing market and a global luxury destination, says Grant Smee, CEO of Only Realty Property Group.

And this trend has recently become even more aggressive, Smee notes.

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While various factors are at play, like a limited supply of stock and foreign investor demand, the growing trend of buying properties to let out short term has had a big impact on prices, he says.

Capetonians as well as people looking to move down south, will know that central areas like the CBD and Atlantic Seaboard have become virtually unaffordable for many South Africans.

This price explosion has also served to drive up prices in other, more outlying areas like the Western Seaboard (Blouberg, Melkbosstrand...), as well as towns including Stellenboschand Somerset West.

The biggest impact arguably has been on rental prices, Smee says.

"As more and more units are built (for Airbnb purposes), the availability of long-term units has become limited and therefore prices have gone up."

The solutions put forward to offer more protection to locals include implementing a surcharge for foreign buyers, and reclassifying short-term rentals operating as businesses under commercial property rates.

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

To listen to Grant Smee in conversation with Stephen Grootes on 702's The Money Show, click on the audio link below: