Average residential rent increased by R193, reaching R7 971 in Q2 2022, from R7 778 in 2021’s comparative quarter, reflecting growth of 2.6%, according to the quarterly PayProp Rental Index.
The moving average trendline, which tracks a rolling three-month average, shows a clear upward trend – good news for landlords and agents, says PayProp’s Johette Smuts.
For the first time since Q3 2017, Q2 2022 witnessed all nine of SA’s provinces record positive year-on-year growth:
The Western Cape remains the most expensive province for tenants in South Africa with an average rent of R9 462 in Q2 2022, up from R9 185 in Q2 2021. The province recorded rental growth of 3%, outperforming the national average of 2.6% for a fifth consecutive quarter.
The Northern Cape retained its spot as the second most expensive province in which to rent with its average rent having increased by 9% year-on-year in Q2 2022, by far the highest out of all nine provinces. This figure finished at R8 626, up R175 from the R7 910 recorded in Q2 2021.
The average trendline in Mpumalanga shows steep upward growth over the past year, having recorded rental growth rates above 3% in the last four quarters and outperforming the national average. Smuts says that during the most recent quarter, the province achieved growth of 5.2%, the second highest rate in South Africa: “Average rents in Mpumalanga rose to R7 870 in Q2 2022, up from R7 484 over the corresponding period the year before. Continued strong performance could see the province overtake the national average, currently at R7 971, by the end of next year.”
Limpopo recorded year-on-year rental growth of 4.7% in Q2 2022, experiencing the third highest rental growth of any province with average rent increasing from R7 017 in Q2 2021 to R7 350 in Q2 2022. The province came off fourteen consecutive quarters of negative rental growth up until early 2021 and it has seen an impressive turnaround since. “Rental growth in the province has outperformed the national average every quarter since Q2 2021, although looking at the trend line, it appears that it might now be levelling off.”
Smuts says that although we’ve seen a continued recovery of the rental market in Q2 2022, agents and landlords should continue to remain mindful of the negative effects on a tenant’s ability to pay their rent. “The challenge for rental agents over the next few months will be to monitor their portfolios for signs of growing arrears, use the tools available to them to recover late payments where necessary, and vet all applicants carefully.”
