The most popular province to rent a home in South Africa – and what people are paying

TPN’s latest data shows that South Africa’s residential rental vacancy rate is close to record lows after 2023, and the Western Cape seems to be the first choice – with homes between R12,000 and R25,000 a month in hot demand.

The TPN Residential Vacancy Survey for the fourth quarter of 2023 shows that the national vacancy rate has decreased further from 6.76% in the third quarter to 6.69%.

The average national vacancy rate for the year 2023 was 6.73%, which is an impressive 11.69% decrease from 2022.

The report suggests that, on the back of strong demand, there has been a gradual improvement in the TPN supply rating, which ended at 58.99 points in 2023.

This indicates a positive response to the increased demand. The data indicates a positive future outlook for residential units in South Africa, where they will continue to remain occupied.

One of the main reasons for the strong performance of the residential rental market in South Africa was the higher interest rates and low consumer confidence.

These factors have discouraged many South Africans from buying a home and, instead, shifted their focus towards renting residential properties that are considered more secure and predictable.

The report has pointed out that slow economic growth, high unemployment, and inadequate municipal service delivery have made many South Africans highly conscious of location risk.

When deciding where to live, people now prioritise secure and well-serviced areas.

As a result, the demand for rentals has increased in well-managed municipalities like the Western Cape while decreasing in areas like Kwa-Zulu Natal (KZN).

The Western Cape has maintained the lowest vacancy rate in the country, with only 3.18% of residential properties lying vacant by the end of 2023.

In contrast to the positive performance experienced by the Western Cape and even the Eastern Cape towards the end of 2023, KwaZulu-Natal saw an increase in vacancies in the last quarter of 2023.

This increase caused the vacancy rate to break the 10% mark after a confident performance in the third quarter of 2023.

What they’re paying

TPN highlighted that the last quarter of 2023 has seen a strong performance from rental stock priced between R12,000 and R25,000, decreasing vacancies from 8.56% in the third quarter to 5.17% in the fourth quarter.

This excellent performance is also reflected in the overall Rental Market Strength Index exceeding the 60-point mark due to a high demand rating of 76 points.

This means properties priced between R12,000 and R25,000 are the most in demand across the national renal stock.

The rental value band between R7,000 and R12,000 also continued its relatively strong performance, with 6.2% of rental stock not occupied in the last quarter of 2023.

This is an uptick from the previous quarter when only 5.88% was vacant.

Interestingly, at the start of 2023, the rental value band between R7,000 and R12,000 had the lowest vacancies of all rental value bands but has since increased quarter-on-quarter.

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