New Airbnb rules to benefit Sectional Title Schemes amid global restrictions

• Global Airbnb Restrictions and Local Impact: Major cities worldwide have imposed strict Airbnb regulations, and South African cities like Cape Town may follow, changing short-term letting dynamics.
• New Regulations Could Discourage Short-Term Letting Investment: The Department of Tourism's new policy could impose stricter compliance and tax requirements, potentially deterring buy-to-let investors from focusing on short-term rentals.
• Potential Benefits for Sectional Title Schemes: New regulations may encourage property owners to convert short-term rentals into long-term leases, helping stabilize communities and improve property values within Sectional Title schemes.

Airbnb Regulations: Key Changes and Impacts on South Africa's Property Market

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1. Global Airbnb Restrictions Lead to Local Change

Dozens of cities, including major global hubs like New York, London, and Barcelona, have introduced restrictions on Airbnb letting. Cape Town and other South African cities are expected to follow, with new regulations being finalised by the Department of Tourism (DoT).

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These changes are set to reshape the local property market, particularly in buy-to-let investments and residential letting.

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2. New Regulations: Compliance and Tax Requirements

The DoT’s policy aims to integrate short-term rentals into the mainstream tourism sector by enforcing rules similar to those for hotels.

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Airbnb owners will likely face stricter compliance and tax requirements, which could deter new and current buy-to-let investors from purchasing properties for short-term letting. This may lead to fewer units on the market for short-term rentals and encourage a shift toward long-term leasing.

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3. Restrictions on Short-Term Letting Duration

The regulations may also limit how many days per year a property can be rented out on platforms like Airbnb, a strategy already adopted in cities like Berlin and Barcelona.

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This is intended to reduce the dominance of short-term rentals and encourage property owners to convert their units to long-term rentals, addressing concerns about the lack of affordable housing for local residents.

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4. Impact on Cape Town’s Rental Market

Cape Town, recently named the 2025 Best City in the World by Time Out, is a hotspot for Airbnb. With over 23,000 short-term listings but only around 700 long-term rentals in central areas, the new rules may push more property owners to consider long-term tenants.

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This shift could increase the availability of affordable housing and provide more options for renters, as Airbnb rentals range from R950 to R20,000 per day.

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5. Benefits for Sectional Title Schemes

Sectional Title (ST) and community housing schemes, particularly in cities like Cape Town, Durban, and Johannesburg, have struggled with the challenges of high turnover from short-term tenants.

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The new regulations could force property owners to either sell or convert Airbnb properties into long-term rentals. This would help stabilize the communities, improve security, and encourage owners to take better care of shared property.

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6. More Stable Property Market Ahead

With more properties moving to long-term leases, the market will become more competitive, offering better options for renters. This could also motivate Sectional Title owners to engage with property management professionals and volunteer for trusteeships, helping ensure that their schemes are well-run, compliant with laws, and offer a good quality of life to residents.

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In summary, the upcoming Airbnb regulations in South Africa are poised to impact both the short-term rental market and Sectional Title schemes. By encouraging long-term leasing and promoting better management practices, these changes may improve affordability and stability in the local property market.

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