Rental prices hit a new high as demand surges across the North Coast
The average rental price in KZN topped R9 000 for the first time as families increasingly choose short-term options.
South Africa’s average rental prices surpassed R9 000 for the first time in the final quarter of last year.
The milestone represented a 5.2% year-on-year increase, according to data from the Payprop Rental Index.
Since the onset of the pandemic, rental prices have remained relatively stagnant, with landlords prioritising guaranteed rentals to avoid potential defaults. This strategy, in my view, has always been prudent; losing just one month’s rent could offset any marginal increase achieved over a 12-month period. Landlords understandably value tenants who consistently pay on time every month and take care of their property, far outweighing those who might default for extended periods.
However, with that all said, rental property prices are now on an upward trajectory due to several factors, with demand playing a pivotal role. Rental demand is currently at its highest in years, particularly in areas like Ballito and its surroundings, which remain popular among newcomers who often opt to rent before laying down roots or committing to property purchase. There is also a current trend where people want to remain flexible as they do not know exactly where they want to be a few years’ time, thereby electing to rent instead of buying in case they want to semi-grate or emigrate – which also tightens rental supply.
Supply has tightened recently, with many tenants choosing to renew their leases rather than deciding to buy or move – a trend that has become increasingly common. This adds to the longstanding challenge of limited rental availability on the North Coast.
It may come as no surprise that the Western Cape leads with the highest average rental value of R11 141, reflecting a robust 10.1% increase over the past year. All the reasons I listed above are the same for the Western Cape, just amplified. Similarly, KwaZulu-Natal ties with Gauteng for third place, averaging R9 147, with a 4.2% annual rise.
With what we are seeing, combined with the trajectory of the current micros and macros, I would not be surprised to see a larger percentage increase of average rental prices on the North Coast by this time next year.
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