Converted shipping containers are becoming an increasingly important part of South Africa’s residential rental market, according to industry experts.
Nadia Aucamp, broker/owner of Johannesburg agency RE/MAX All Stars, says that more investors in her city are using them as backyard rental units. This trend could provide new affordable rental homes while making more efficient use of land in cities.
Inexpensive rental homes are getting harder to come by. According to the Q4 2024 PayProp Rental Index, the share of properties renting for less than R7 500 a month fell by 3.8% to 47.6% over the previous year, while average rents grew by 5.2%.
In contrast, small, entry-level container homes can cost not much more than R200 000. Even the largest models come in well below the average cost of a home in SA, which is now over R1.6 million. That makes container homes a more affordable option for both investors and tenants, and the simpler building process could allow more stock to hit the market quickly.
Some obstacles remain
Container homes may not appreciate in value as quickly as traditionally-built homes, making them a less attractive option for owner-occupiers. For property investors, though, they are a lower-cost way to grow their portfolios.
To date, Johannesburg has been the main market where container homes have taken off. But they could catch on in other markets where rents are high and space is at a premium – as long as local laws permit. Some municipalities ban or restrict them.
Finance can also be an obstacle. Not all banks will lend towards the purchase of a container home.
But where these obstacles can be overcome, rental agents can help interested investors understand the rules around container homes – and grow their portfolios quickly.
