The rental market is booming in these provinces

·25 Nov 2023

The rental markets in Mpumalanga, Limpopo and North West have seen a surge in demand and rental rates.

According to the Seeff Property Group, this boom in the rental markets follows a dip in property sales after three of the best sales years ever.

Payprop rental data shows that renal inflation has grown 4.3% in Limpopo, 5,2% in Mpumalanga and 9.3% in the North West, with many of these areas experiencing a shortage in the rental market.

“While sales are slightly down, there is still a huge appetite for property investment among residential buyers and a shortage in the affordable price categories,” Seeff said.

“Seeff’s branches say this is largely due to a lack of new developments over the last few years, again offering loads of opportunities for developers to come into the market.”

In Mpumalanga, Anna-Marie de Jager, licensee for Seeff Lydenburg and surrounds, said they are seeing strong growth in the rental markets, even if sales are slightly busier than last year as tenants look to buy instead of paying high rental fees.

The average rental in the area is R6,000 per month, but there have been large stock shortages over the last two years, creating significant opportunities for investors.

Middelburg is also seeing a massive stock shortage, with buyers waiting for stock or opportunity to invest in property for the rental market due to the lack of development.

Rentals are also achieving excellent prices, as houses range from R9,500 to R15,00, complexes from R8,800 to R11,000 per month, and luxury houses from R15,000 to R18,000 per month.

Nicole Teich, manager for Seeff Mokopane, Limpopo, also noted that the market is seeing an influx of savvy investors and first-time buyers.

There has been a significant pickup in the demand for rental properties, which have achieved 30% growth over the last year.

The average monthly rental rate for townhouses runs from R6,500 to R10,000, whilst houses get between R12,000 and R15,000.

Seeff Polokwane’s Oliver Moorcroft added that the market is struggling due to overpriced stock, with high-end properties above R3.5 million struggling to sell. Thus, first-time buyers – mainly government-employed – are the most active in the market.

The rental market is also very active, ranging from R6,750 for a two-bedroomed unit, but rental stock is in short supply below R7,000.

North West is also seeing an increase in remote workers and foreign buyers.

Louise Cawood, manager for Seeff Pecanwood, said that although some property sellers are semigrating to the Cape, many areas are also returning to Gauteng to be closer to their businesses and finding the commute from the Cape unsuitable.

There are also more customers in Pecanwood due to the climate and better value for money compared to the Cape.

“The close proximity to Johannesburg and Pretoria combined with the amazing highveld weather and secure country lifestyle makes it a top choice for luxury buyers. Foreign buyers are also finding they get more value compared to what they would get in Europe, the UK or the Cape,” Seeff said.

“Online ordering and deliveries from all the retail food outlets now delivering to the area has also made it easier for those working remotely who no longer have to drive to a shopping centre in the cities to shop.”

Properties available for rent in the North West, Mpumalanga and Limpopo can be found below: