Cape Town’s glass towers rise but who can afford the view? 

If you live or work in Cape Town, you are faced with a choice: stay in the CBD and hand over half your salary to a landlord, or flee to the suburbs for more space and less rent to sacrifice your sanity to the N1. 

We complain about municipal rates, digital nomads and the rise of Airbnbs, but we stay. What used to be anecdotal grumbling now has hard numbers in the form of the Central City Improvement District’s (CCID) latest report. 

The 2024 State of Cape Town Central City Report, released on 17 September 2025, details how property investment in the CBD reached R9-billion this past year, up from R7.2-billion the year before. 

“It is distinctly, I think this is fairly categorical, that Cape Town’s CBD is an oasis within the South African context,” said Paul Court, the city’s chief economist at the unveiling of the report. This “oasis” does not come for free. The same dynamism and investment that keeps the CBD alive is also pushing it out of reach for many. 

 Anatomy of an ‘oasis’ 

The CCID, which has tracked the CBD for 13 years, has divided its 1.6km² patch into four precincts. Within that small area, 27 new property developments are either complete, under construction or on the drawing board. Together they’re worth R9-billion. The City’s 2022 valuation pegged the CBD’s property stock at R42.5-billion. 

Cape Town Mayor, Geordin Hill-Lewis, noted the national imbalance: “Seventeen percent of all construction work in South Africa is currently taking place in Cape Town. Whereas Cape Town is only 9% of the national economy. So we are nearly punching double our weight in construction.” 

Office vacancies in the Cape Town CBD, currently sitting at 9.5% according to the Q2 2025 SAPOA Office Vacancy Report, are lower than pre-Covid levels and far below Johannesburg’s “rather dismal performance” of a 16.5% vacancy rate, Sharon Sorour-Morris, CCID communications manager and author of the report, said. 

Retail is thriving too, with 1,323 shops and a vacancy rate of 6%. More than 90% of retailers surveyed said they were satisfied with conditions. 

“We’re seeing strong property price growth,” Court said. “We’re seeing property developments. We’re seeing accommodation come in. It’s a place where people want to live. It’s a place where people want to find jobs.” 

Residential rush 

Nearly half of the 27 new projects mentioned earlier are residential, valued at R2.93-billion. Sorour-Morris called it “the most dramatic investment into the CBD”, second only to mixed-use developments that combine living, working and leisure into one vertical stack. 

One such flagship development is City Park, a R1.3-billion conversion of the former Christiaan Barnard Hospital. It will soon host Mama Shelter, a French hotel brand, alongside Cape Town’s first branded residences. Nearby, One on Bree will add more than 270 apartments and a luxury hotel in a 131m tower, a R1.1-billion project by Johannesburg’s Acsion Group.  

According to the report, 94% of current CBD residents said they are “very happy” living there, citing nightlife, work proximity and the cosmopolitan pull. Together, these new developments are pushing the CBD further into the territory it already occupies, turning it into a collection of luxury addresses. 

Paradise at a premium 

Court explained the paradox. Property prices in Cape Town have risen by about 25% over recent years – a clear sign of investor confidence. Yet the GDP per capita over the same period grew between 0% and 1%. The city’s economy is expanding but not fast enough for the average household to keep up. 

More than a third of retailers surveyed by the CCID cited high operating costs, which include rent and utilities, as the main challenge that their business faces. 

Median sectional title prices in the CBD rose from R1.59-million in 2023 to R1.85-million last year. By January 2025, they had reached R1.95-million. 

Rentals tell the same story. A studio apartment averages R15,000 a month,  a two bedroom comes in at R28,630 and three bedrooms go for more than R70,000. Compare that to the Western Cape’s average household income of R29,720 per month and you see the gap. 

The Airbnb effect 

As a part of the CCID’s research, it looked at property trends online. Of the 193 apartments listed on Property24 in August 2025, 140 were furnished, indicating a strong short-term or corporate rental market, Sorour-Morris said. By Court’s estimate, almost a third of one bedroom units were on Airbnb by late 2023. 

“It is all good and well but you need to create opportunities for long-term residents because those are actually the people you want. You want people who live here that use it and actually grow to change the character of your district,” Sorour-Morris said. 

Hill-Lewis told Daily Maverick that the city is slowly reclassifying corporate Airbnb operators as commercial businesses, subjecting them to higher tariffs. The process, he said, is tedious with landlords quick to insist that they themselves live in these properties the moment the city comes knocking. “We have to enter into a correspondence, build up evidence. It’s not a quick thing; it’s not something we can just flick a switch and 20,000 Airbnbs are going to be converted, it takes time and research but it is slowly being done.”

Short-term letting, Court argued, generates employment and investment. “On the flip side of that is that it does drive property prices and does compete with existing establishments.” 

Business is booming 

The CBD remains Cape Town’s business engine, with 3,290 business entities recorded there in 2024. Eleven of 17 tracked sectors grew, led by finance, law, medicine, media and co-working spaces. 

Retail dominates 40% of the CBD economy.  “Grocery retail in the CBD was boosted with the opening of The Mutual shopping centre in 2024, with anchor tenant Checkers. There are now three major retailers all within walking distance of each other,” Sorour-Morris said. The concept of online grocery shopping has exploded in South Africa and the CBD is now right in the thick of it with the introduction of Checkers Sixty60 “While Woolworths closed its food hall in 2023, it opened a ‘dark’ store which fulfils online orders for Woolies Dash and we also have Pick n Pay using green bike delivery.” 

In the office market, premium-grade rentals climbed 15% year-on-year. Projects like the Rubik and the Matrix, located in Loop Street and Strand Street respectively, are set to inject more high-end office spaces into the mix. 

Long-term vision 

“It’s clear that things are becoming increasingly unaffordable,” Court said. “One of the threats we listed in a SWOT analysis of Cape Town’s economy was the cost of living and the cost of property.” 

Hill-Lewis believes that the city cannot think in election cycles. “When you’re building a city, a city functions on long-term infrastructure. And so you have to plan long term,” he said, with rail devolution or even a new system on his priority list. 

Deon van Zyl, chair of the Western Cape Property Development Forum, added that success brings its own pressure. “One of [the] biggest challenges right now is how to take 5 million people on the road to becoming 10 million.” He said the biggest bottleneck is bureaucratic, with slow land-use and building-plan approvals artificially inflating prices. 

By 2024, the CBD contained 6,819 residential units across 97 complexes. The CCID’s report shows its residents are mostly young, child-free and often semigrated from other provinces. 

It is a report that reflects a CBD on the rise, with billions of rands pouring into new developments, office vacancies falling and strong investor optimism. The same forces driving this prosperity are lifting prices beyond the reach of most locals, contributing to a market increasingly influenced by luxury demand. DM