It’s the good news everyone’s been waiting for: rental growth has returned after a few sluggish years, as the latest PayProp Rental Index shows.
The average national rent grew by 4.2% year on year from Q1 2022 to Q1 2023 – the strongest growth since 2017. In cash terms, the average rental property in South Africa now goes for R8 294 per month, up R336 on the year before.
In even better news for property professionals, rental growth is in fact accelerating, and has been for the last six quarters straight.
The same is happening at the provincial level too. The Northern Cape put in the strongest Q1 performance of the bunch, with year-on-year growth of 10.2%. This province has now enjoyed the fastest growth in the country for each of the last four quarters, and if this continues it could soon challenge the Western Cape for the highest rents in South Africa. Limpopo and Mpumalanga rounded out the top three, while only one province returned falling rents during the quarter.
But as with all things, there are also challenges to contend with. Inflation is still running high, hovering around 7% year on year throughout the quarter. And concerns continue to dog tenants’ ability to afford rising rents – which our arrears and tenant spending data sheds more light on.
To get our full breakdown of national and provincial rents, as well as our detailed analysis of tenant payment behaviour and a deeper look at each province’s rental market, subscribe to the PayProp Rental Index now!