Rental growth rebounds in Q1 2026 – but not everywhere

South Africa’s residential rental market got off to a stronger start in 2026, with growth in rental values picking up for the first time in a year after three consecutive quarters of slowing down.  

According to the latest PayProp Rental Index, annual rent inflation rose to 4.7% in Q1 2026, up from 4.5% in the previous quarter, signalling renewed confidence in the market despite growing economic headwinds. Inflation remained at or below 3.5% in every month of the quarter, resulting in good real-terms growth.

The average national rent reached R9 582 during the quarter, around R450 higher than a year earlier. While this is a healthy improvement for landlords, the national figures also mask growing differences between South Africa’s provincial rental markets.  

Strong start driven by Western and Northern Cape

The strongest rental growth in the country came from the Northern Cape and Western Cape, both of which showed significant acceleration.

The Northern Cape emerged as South Africa’s best-performing rental market, with annual rental growth soaring to 12.9%. This pushed its average monthly rent to R10 821, further widening the gap between it and Gauteng and cementing its position as the country’s second-most expensive rental market.  

Meanwhile, the Western Cape continued its long-running dominance as the most expensive province for tenants. Rental growth accelerated to 7.4%, the region’s strongest performance in a year, making it the first in South Africa to record average monthly rent above R12 000.  

Limpopo also returned to stronger growth, recording an average of 6.6% after a weaker performance in the previous quarter.  

Not all provinces shared in the recovery

According to PayProp Commercial Director Michelle Dickens, these contrasting performances highlight the importance of local market knowledge.

“The national average only tells part of the story,” she says. “The first quarter highlighted how differently South Africa’s provincial rental markets are performing.”

Mpumalanga recorded the weakest rental growth in South Africa at just 0.4%, suggesting its recent recovery may be losing momentum. The Free State did only slightly better at 0.6%, extending a slowdown that first became apparent late last year. The Eastern Cape also slipped below the national average for the first time in a year, with rental growth easing to 3.5%.  

According to PayProp Commercial Director Michelle Dickens, these contrasting performances highlight the importance of local market knowledge.

“The national average only tells part of the story,” she says. “The first quarter highlighted how differently South Africa’s provincial rental markets are performing.”  

Can the momentum continue?

As rental growth continues to outpace consumer inflation, the rental market is returning its strongest real-terms rental growth since mid-2025.  

It might not last. Rising inflation and higher interest rates could place additional pressure on both tenants and landlords in the months ahead. Higher borrowing costs increase landlords’ investment expenses while also squeezing tenants’ disposable income, potentially limiting future rental increases.  

Rental market performance in 2026 will hinge on how inflation, interest rates and broader economic conditions evolve. The first quarter may have marked a welcome turnaround for South Africa’s rental market, but landlords, agents and investors alike will be watching to see if that early strength holds out.