The Cape Town water crisis has been the topic of discussion on most media channels for many months now, resulting in a lot of panic and speculation. The looming threat of Day Zero had many all packed up and ready to leave, and had a lot of daunting, dramatic and depressing press coverage, further adding to the panic. The long queues at water collection points further fanned the flame of panic for the locals, and added more for the media to discuss, resulting in worldwide fear about Cape Town, and eventually other cities running out of water. The water crisis did, without a doubt, affect the economy in the Western Cape to a large extent. However, in this article, we shall focus on some of the ways that the property sector was affected.
Firstly, due to the press coverage, there was a drastic decrease in the number of tourists visiting the Western Cape. Tourists play a huge role in contributing to short term property rentals by booking holiday homes, for example via Airbnb. With the decrease of tourists, a lot of property owners experienced their first decrease in rental revenue in almost a decade. This led to several property owners putting their properties into the long-term property rental market- adding to the number of properties available for long-term tenants to choose from. This surplus is one of the reasons that has led to a decrease in residential property rental prices as competition to attract tenants increased.
Another effect that the drought has had is an increase in “greener” lifestyles. Capetonians have become more aware of their water usage, and mechanisms to save and recycle water have become popular. Grey and black water systems have been installed at a rate like never before, and education on ways of reducing of water usage has been widespread. Water tariffs have increased tremendously- forcing people to rethink their water usage amounts. Property developers and contractors have also had to develop property in more water-conservative ways, with many now using grey water on site. Offices and residences have also had to reduce water usage- if not for environmental reasons then for the sake of their operating costs as water rates have soared. The drought has, in essence, forced Capetonians to become water conscious and to find ways to save- and this can definitely be seen a positive effect of the drought.
Although there was much speculation at the beginning of the drought that property prices would take a dive due to the drought, this has not really been the case. The economy as a whole has been affected by the drought- but property prices have not really had a direct decrease due to the water crisis.