Cape Town Property Trends 2025: The Hotspots, Hurdles, and Hype

Cape Town’s property market in 2025 is gearing up to be a mixed bag of opportunities, challenges, and exciting transformations. From stricter rules on short-term rentals to the rise of neighbourhoods you may have overlooked, here’s everything you need to know to stay ahead of the curve in the Mother City’s real estate game.

Airbnb: Here for a good time, not a long time?

In 2025, Cape Town might follow the likes of Lisbon, Barcelona, and Berlin by tightening the reins on short-term rentals (STRs) like AirBnb. Why? Because STRs are often blamed for reducing the availability of long-term rentals and driving up costs for locals.

Most professional AirBnB hosts are on board with quality standards and operating legally — it's rent control that raises eyebrows. History shows rent control doesn’t always work as intended, often leading to reduced supply and stifling new developments.

The way forward? A focus on balancing the scales without tipping the market into chaos. Incentivising development and freeing up land for Build-to-Rent (BTR) schemes could offer a win-win, creating more long-term rental stock while keeping developers interested.

For property owners feeling the pinch from rising STR costs and seasonal peaks, 2025 might be the year to explore medium- and long-term rental options. With more stable income streams, it’s a less stressful way to manage properties (and one that’s gaining traction as the STR margins get tighter).

Where’s the action?

As Cape Town grows, certain areas are coming into the spotlight for investors and homeowners alike.

• Gardens: Once dominated by industrial spaces, Gardens is undergoing a bit of a glow-up. Proximity to the CBD and the fresh buzz of new developments (like those on Roodehek Street) are turning it into a prime area for modern living and innovative housing solutions.

• Green Point: Already a favourite for its lifestyle appeal and central location, Green Point is poised for densification. Expect more sleek apartments and community-focused developments as demand for this area continues to rise.

Developers looking to tap into these neighbourhoods are being advised to think beyond the basics. Partnering with professional operators who specialise in branding, medium-term rental strategies, and creating standout spaces is no longer optional — it’s the edge you need in a competitive market.

Local vs. foreign investors: Who’s buying what?

When we look at our Neighbourgood Romney property, we see a near-even split of local (52%) and foreign (48%) investors. Extrapolating off this information, we can assume that the broader Cape Town property market is split more or less the same way. 

Cape Town’s appeal to international investors is no surprise, offering stunning views, favorable exchange rates, and a lifestyle many only dream of. These foreign investors lean towards luxury properties, vacation homes, and commercial investments, with hotspots like the Atlantic Seaboard, City Bowl, and Stellenbosch topping their wishlists.

While locals may not have the luxury of favourable exchange rates, they’re practical and savvy, often focusing on rental opportunities or family homes in accessible locations. Local investors tend to feel the pinch of economic shifts more acutely, but they’re just as keen to make smart moves in the market.

Bridging the gap between supply and demand

Here’s the challenge Cape Town faces in 2025: demand is high, but new developments aren’t keeping pace. Rising construction and material costs are part of the problem, but tight restrictions and a lack of developer incentives also play a role.

What’s the fix? Experts suggest:

• Relaxing development restrictions to make it easier to build.

• Offering tax breaks to encourage Build-to-Rent (BTR) developments.

• Freeing up land for developers to create more housing options.

The goal is a property market that balances supply and demand, offering more options for locals and keeping Cape Town on the map for international investors.

So, what’s next?

One thing remains clear when we’re talking about the future of property in Cape Town: opportunity is everywhere. From the rise of Gardens and Green Point to the potential regulatory shake-ups, the next year is all about adaptability. Whether you’re a developer looking to make your mark or a buyer hunting for the perfect spot, now’s the time to pay attention.

At Neighbourgood, we’re more than just about co-living and co-working spaces - we’re about building communities that thrive in this incredible city. Need help navigating the trends, or want an investment partner that really knows Cape Town’s property market? We’ve got you covered.