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🏙️ Cape Town’s Housing Crunch: Micro-Apartments vs. Co-Living

🏙️ Cape Town’s Housing Crunch: Micro-Apartments vs. Co-Living

August 31, 2025

Cape Town’s rental market is under pressure like never before. High demand, limited supply, and record-breaking rents are forcing young professionals and middle-income earners out of prime neighbourhoods like Sea Point, the City Bowl, and the Atlantic Seaboard.

The question is no longer whether we need more housing. We do. The question is what kind of housing can meet this demand?

Two models are emerging in Cape Town that aim to provide “naturally affordable” homes — no subsidies, just smart design: micro-apartments and co-living.

Micro-Apartments: The Blok TenOnV Model

Developer Blok has pioneered the delivery of micro-apartments in Cape Town, with units as small as 19m². At the TenOnV project in the City Centre, these compact homes include a kitchenette, bathroom, and an open-plan living space that doubles as a bedroom.

Price: R1.15m – R1.425m
Monthly rent (est.): R9,500 – R12,000

For tenants, the value lies in independence: a private, central home without the need to share. For investors, it’s about yields. Highlighting the strong rental returns these small units can generate, thanks to their affordability at a monthly rental level or daily rate compared to hotels.

Co-Living: Affordable CBD Example

Co-living is Cape Town’s other emerging typology. While premium brands like Neighbourgood operate in the City Centre at higher rates, there are more affordable models available.

In the CBD, new co-living spaces now offer private rooms with en-suite bathrooms and shared kitchens, coworking facilities, and housekeeping for around R13,500/month. However investor may opt for short term rentals which have an higher return/yield, thus the availability of these units will be scarce.

This makes co-living slightly more expensive than a micro-apartment, but if you consider the rate is all-inclusive, covering utilities, amenities, and access to a built-in community. For young professionals, digital nomads, or newcomers to Cape Town, that added value can outweigh the loss of privacy and work out to be more affordable.

The Trade-Offs

So which model makes more sense in Cape Town?

Micro-apartments: Independence and privacy, appealing to those who want their own space. Monthly rents are achievable at R9.5k–R12k.
Co-living: Community, convenience, and flexibility. R13.5k/month may be higher, but the price includes extras that reduce friction and build connections.

Both serve different psychographics — and both are seeing steady demand.

Why Cape Town Needs More of Both

Cape Town’s housing shortage won’t be solved by rent controls or policy tweaks alone. It will be solved by innovation in what gets built.

The conclusion is clear:

For investors and developers, the City Centre remains a strong market for both micro-apartments and co-living. Rental demand is deep, yields are attractive, and the appeal of central living is not going away.
For broader affordability, however, these models can’t remain exclusive to the CBD. To truly address the affordability crunch, developers will need to bring micro-apartments and co-living to secondary business districts like Durbanville, as well as transport-linked nodes where the City of Cape Town is driving decentralised economic growth.

This dual approach — City Centre innovation and suburban transport-linked affordability — is what will ultimately unlock more housing, attract new investment, and sustain Cape Town’s economic growth.

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