Whatshot

2025
2024
June
April
2023
March
2022
2021
2020
March
February
2019
December
November
October
September
August
July
June
May
April
March
February
2018
December
November
October
September
August
July
June
May
April
March
February
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
May
April
March
February
January
2013
December
November
October
September
August
July
June
May
April
March
February
January
2012
December
November
October
September
August
July

Listen up Tenants and Landlords

Listen up Tenants and Landlords

Author: By: Andreas Wassenaar
Date: 2025-03-11

If you are a Tenant, Landlord, or aspiring property investor, the state of the rental market and the returns provided are of interest. The quarterly Payprop Rental Index report provides an excellent national overview of rental returns and tenant behaviour and provides insight into the high-demand areas in the country and the price brackets that are performing best.

The Payprop report highlights show that the average rent paid in South Africa is R9,051 p.m., the average national rental growth is 5,2% year-on-year and Limpopo is the province currently experiencing the fastest rental growth.

The rental growth rate of 5,4% represents a recovery in the rental market and is the highest rental growth rate recorded since December 2017. At the same time, our national CPI inflation rate has been recorded at 3% showing real rental growth at 2,4%. Some Economists are anticipating a further two interest rate cuts for 2025 which will further relieve the financial pressure on debt repayments in the economy. With less money spent on servicing debt, tenants have more money to spend on rental and shift into higher-priced properties at higher rental rates. Although the largest group of tenants in the country pay between R5k to R7,5k p.m. this group has shrunk from 31.2% to 28,9% of tenants with the rental categories above all growing. The R7.5k to R10k p.m. bracket grew to 22.7%, the R10k to R15k p.m. to 17.1% and the R15k and above category grew to 11.6%. In KZN, which reflects the national average the strongest growth has been in the top tier of the rental market.

The number of tenants in arrears nationally is 17.1% and the average rental owing is currently 77.1% of one month's rental. For KZN the tenants in arrears are a little higher at 19.4% and these tenants owe on average 71.7% of one month's rent. Interestingly the deposits demanded by Landlords are tending to increase, with the average deposit currently at 1.31 times the average rent nationally, and 1,2 times the average rent in KZN. It is not unusual for Landlords to insist on 1,5 to 2 times the monthly rent as a deposit.

The analysis of tenant income and spending shows that tenants spend as much as 44.1% of their income on debt repayments, and 28.7% on rent with 27.2% on average as disposable income. This is useful information for a Landlord as a tenant application showing rental being above 30% of income would raise a red flag. The risk classification of tenants as measured by Payprop shows that 40.8% of tenants are in the "minimum risk" category, with 19.7% in the "low risk" category, 13.8% in the "medium risk" definition and 25.8% classified as high risk. For 1 out of 4 prospective tenants being "high-risk" a Landlord would be well-advised to use rental agents that apply rigorous credit checks and screening to mitigate this serious risk.