Average rents grew by 5.6% year on year, 0.4% more than in Q4 2024 and the highest since the 5.9% recorded in Q3 2017.
In cash terms, the average rent now sits at R9 132, an increase of R478 from a year earlier.
At the provincial level, every province also experienced positive rental growth in Q1 – including Mpumalanga, which was at risk of falling into negative territory after putting up growth of only 0.2% in Q4 2024. In Q1, growth in the province recovered to 1.1%.
At the top of the table, Limpopo and the Western Cape continued their runs of rapid growth with 10.9% and 9.6% growth respectively. Average rents in the Western Cape have risen by nearly R1 000 over the past year.
Among the less expensive provinces, the Free State was quick out of the blocks with 7.6% year-on-year rental growth in Q1. This was enough to take seventh place from the Eastern Cape.
Meanwhile, the quarter’s weakest performance came from Gauteng, where rental growth dropped from 3.4% in Q4 2024 to 2.9% in Q1 2025. The province still has the third highest rents in SA, but the average rent in faster-growing KwaZulu-Natal is now just R31 less.
Rapid rental growth didn’t lead to a rise in tenant arrears in Q1 in the country’s economic engine. In fact, the share of tenants in arrears fell to 17.0%, equalling the record low set in Q4 2023. Additionally, the 77.1% of rent owed by the average tenant in arrears is unchanged from Q4 2024 and in line with the three-year average. PayProp Tenant Assessment Report data on tenant incomes also shows that tenants spend an average of 28.8% of their income on rent, below the 30% that is often used as a guideline for affordability.
However, if tenant incomes don’t keep up with accelerating rental growth this year, that could quickly change. The outlook for that is mixed. May’s interest rate cut will relieve some of the pressure on tenants by reducing debt repayments, but economic growth is also expected to be slow this year, which could slow down income growth.
Rental agents will need to make sure that they are not only checking rental applicants’ affordability, but also reassessing existing tenants at renewal.
To read the latest PayProp Rental Index, visit https://www.payprop.com/za/rental-index
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