The average rent in every province in South Africa right now

PayProp has published its latest rental index for the second quarter of 2022, showing South Africa’s rental growth is continuing its upwards trend since April last year.

Over the second quarter, the group tracked rental growth of 2.5%, 2.6% and 2.7% in April, May and June, respectively.

Johette Smuts, the head of data analytics at PayProp South Africa, said: “Inflation, unfortunately, also continued to rise in the most recent quarter with CPI breaching the Reserve Bank’s target upper limit of 6% during May and June.”

“The rising cost of fuel and food contributed to the current high levels of inflation, which can be seen around the world. Central banks are responding by increasing interest rates – including the Reserve Bank, which has raised it at every bimonthly meeting since November 2021.”

Smuts said that in July of this year, the repo rate was increased by 75 basis points, and further aggressive hikes can be expected during the rest of the year.

High levels of inflation and increasing interest rates could, however, continue to put pressure on tenants who are already under financial strain.

This may force some to seek out more affordable accommodation – preventing further rental market recovery, said Smuts.

“On the other hand, higher interest rates and a reduced ability to save may mean that some higher-income tenants decide to keep renting instead of buying their own properties, which would have the opposite effect.”

What people are paying

For the first time since 2017, all nine provinces recorded year-on-year (YoY) rental growth.

PayProp also noted that various factors, including the recovery from the Covid-19 pandemic, house prices, housing shortages, development, short-term rental listings and the overall economic performance of the country, could affect rental growth rates.

• National: (+2.6%), Data shows that nationally rents increased by 2.6% in the second quarter of the year while the average cost of rent increased by R193, reaching R7,971 per month. According to PayProp, this shows a clear upward trend.

• Eastern Cape: (+4.4%), Rental growth in the Eastern Cape outperformed the national average in all but one of the last ten financial quarters said PayProp. Rents in the area have increased to R6,451 from R6,365 the year before.

• Free State: (+1.9%), According to PayProp, rental growth in the Free State has rebounded, but overall performance remains weak. Despite the increase over the second quarter, it is still the second lowest country in terms of average rent at R6,328.

• Gauteng: (+0.3%), The country’s economic hub is seeing some recovery with the first increase since the start of 2021; the increase, however, is the lowest of all nine provinces. Average rent increased to R8,319 in the second quarter of this year.

• KwaZulu-Natal: (+3.0%), PayProp reported that the coastal province has been outperforming the national average for five consecutive quarters since Q2 2021. Average rents have increased to R8,443 from R8,200 the year before.

• Limpopo: (+4.7%) Limpopo continues its winning streak by outperforming the national average every quarter since Q2 2021. Despite this, PayProp said that by looking at the overall trend, Limpopo’s rental growth might be levelling off. Rents in the province now average at R7,350.

• Mpumalanga: (+5.2%), PayProp has recorded steep upward growth over the last year for Mpumalanga with above 3% increases each quarter. The second highest rental increase has seen rents in the area average R7,870.

• North West: (+3.9%), The North West province saw a substantially higher increase when compared to the national average. The province has the cheapest rent on average at R5,468 in Q2 2022.

• Northern Cape: (+9.0%), Marking the most significant increase across all nine provinces, the Northern Cape now has an average rent of R8,626. According to PayProp, this is up R715 from the year before. The province is the second most expensive to rent a house or apartment in South Africa.

• Western Cape: (+3.0%), According to PayProp, the Western Cape reported an above national average increase in rental growth. The province remains the most expensive province for tenants in the country, with the average rent being R9,462.

Read: Massive strike planned for South Africa – what you need to know