Formally gazetted in October 2024, South Africa’s digital nomad visa has been celebrated across the tourism industry for its impact on the local economy. But Cape Town locals are becoming increasingly vocal about visitors driving up prices and competition for housing in the city.

It’s unclear how many, if any, official remote working visas have been granted in South Africa since their introduction. A spokesperson for Home Affairs Minister Leon Schreiber did not respond to a query about data availability.

Cape Town, which has been a strong supporter of the visa, has jumped out of the starting blocks eager to welcome digital nomads. Last week, the City of Cape Town and Work Wanderers announced Nomad Week – designed for digital nomads to meet and network.

James Vos, Mayoral Committee Member for Economic Growth in Cape Town, said: “Hosting Nomad Week reinforces our commitment to positioning Cape Town as Africa’s top destination for remote workers.”

The visa is also supported by major industry bodies.

“Remote workers and digital nomads are like long-term tourists,” Rosemary Anderson, National Chairperson of the Federated Hospitality Association of Southern Africa, said after implementation of the visa. “They’ll be staying in our guesthouses, dining in our restaurants, working from our coffee shops and exploring our tourist attractions. This sustained economic activity is exactly what our industry needs to thrive and create more jobs.”

Digital nomads also appear to be loving the city. Nomad List, an online site that live-ranks cities based on social media posts, currently lists Cape Town at number seven in the world.

Locals less than thrilled

But Cape Town locals are less than thrilled. A scan through the comments on any tourist’s TikTok video of Cape Town will reveal a number of South Africans reflecting their concerns about the increasing number of tourists in the city and encouraging them to go home at the end of their stay. Particularly irksome for many is international visitors commenting on how cheap the city is in the face of a cost-of-living crisis for many locals.

Also of major concern is housing availability. The South African digital nomad visa allows visitors to stay for up to three years with the possibility of renewal. In contrast, neighbouring Namibia’s visa allows a stay of up to six months with no opportunity to renew until 12 months after the original expiry date.

Cape Town Mayor Geordin Hill-Lewis has indicated that digital nomads, with a required annual income of over R600 000 (€30 000), are not competing at the same rental price point.

Work Wanderers research shows that digital nomads typically earn well above this – ranging from US$50 000 to US$123 000 per year.

Competition for rental property

But competition for any rental property in the city is stiff and the city’s draft spatial development plan for the central business district (CBD), released last year, is clear that there remains insufficient supply to accommodate demand for long-term rentals. With over 70% of CBD residential accommodation stock targeting the hospitality industry, the growth in the visitor economy will no doubt suppress long-term letting even more.

There has been mixed response to digital nomads globally with fears that they add to the burden of over-tourism. Last year, locals in a number of European cities – including Amsterdam, Athens and Barcelona – protested the impact of over-tourism.

Governments, however, are increasingly viewing digital nomads as a new market to be captured. South African President Cyril Ramaphosa recently reiterated the country’s focus on growing tourism as part of the country’s economic growth strategy.

“We are scaling up a range of tourism promotion strategies to restore inbound tourism figures to pre-pandemic levels. These strategies include an improved tourism visa regime, streamlining the tour operator licence process, increased investment in tourism infrastructure and services and improving safety and security at tourism sites.”

Looking at the impact of digital nomads on small island states, the World Economic Forum cites “the stimulation of critical infrastructure such as improved internet connectivity, co-working spaces and tech hubs” as a benefit.

Impact on housing

But it also acknowledges the impact on housing stating: “Increased demand for rental properties, driven by incoming digital workers, can lead to rising housing costs, potentially displacing residents or making housing unaffordable.”

This phenomenon has been observed in countries, such as Portugal and Barbados, where the surge of digital nomads strained the local real estate market.

New Zealand is the latest country to adjust visa regulations for digital nomads. Introducing the new visa this week, New Zealand Tourism and Hospitality Minister Louise Upston said: “Many countries offer digital nomad visas and the list is growing so we need to keep pace to ensure New Zealand is an attractive destination for people who want to ‘workcation’ abroad.

“Compared to other kinds of visitors, international remote workers have potential to spend more time and money in New Zealand, including during the shoulder season.”