3 neighbourhoods in South Africa charging an average of R120,000 per month for rent
The Western Cape has the lowest rental vacancy rates in South Africa, and upmarket units in neighbourhoods such as Camps Bay, Clifton, and Bantry Bay average up to R120,000 per month.
This was revealed in the Rode’s Property Report for the second quarter of 2024, which showed National rental vacancies were at historic lows.
Flat vacancy rates on a national level averaged 6.7% in the second quarter of 2024, down from 7.9% in the first quarter of 2024, according to Rode’s residential survey data.
Vacancy rates are now below the average 2023 level of 7.2%.
The Western Cape continued to stand out with its low flat vacancy rate of 2.7% in the second quarter of 2024, well below the national average.
Based on first-quarter 2024 PayProp data, the Western Cape has the best tenants of all nine provinces, with only 14.2% of tenants in arrears.
This trend aligns with that highlighted in TPN’s Vacancy Survey Report for the first quarter of 2024.
The credit bureau noted that this is a result of high interest rates combined with poor employment and general political and economic uncertainty.
These factors have led to a decline in the number of households living in a property that they own or are in the process of paying off.
This also applies to the Western Cape’s most affluent areas.
In 2024, several property experts noted that High-Net-Worth Individuals (HNWIs) are increasingly opting to rent rather than buy houses across Cape Town’s Atlantic Seaboard.
HNWIs often have dynamic lifestyles, requiring frequent relocations for business or personal reasons. The global work-from-home shift is a major driver of this.
Renting allows them to enjoy the luxury and exclusivity of these prestigious areas without the long-term commitment of ownership—especially in South Africa.
The volatile real estate market can make buying a risky investment, while economic fluctuations and changes in property values can impact the return on investment.
Renting mitigates this risk, providing access to high-end properties without tying up substantial capital.
According to Rode’s report, some of the highest rentals are in Camps Bay, Clifton, Bantry Bay, Sea Point, Green Point, and Three Anchor Bay.
Rent for standard units ranges, on average, from R11,250 per month for a one-bedroom to R43,000 per month for a three-bedroom.
However, rentals for upmarket properties are substantially higher.
In Camps Bay, Clifton, and Bantry Bay, rent averaged R40,000 per month for a one-bedroom to R120,000 per month for a three-bedroom.
According to Richard Gray, CEO of Harcourts South Africa, banks clearly prefer lending to home buyers whose monthly bond cost is no more than 30% of their single or joint gross monthly income.
This 30% income threshold for home loans has been a common measure of loan affordability among South African banks.
Using Absa’s bond calculator, assuming a 20-year home loan period at an interest rate of 11.75%, one would have to earn between R133,000 and R400,000 per month to live in these units.
According to Property24’s active listings, over 90 rentals are listed at R100,000 per month or more, with some going up to R300,000 per month.
Considering this, it’s not hard to believe that the average is in the same region.
An example of a three-bedroom house for R120,000 per month in Bantry Bay is listed below.
Read: How much you need to earn to live in the most exclusive estates in South Africa
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