Latest data reveals North West is cheapest province to rent in

The latest rental index has revealed that North West has the lowest rentals, averaging R5,738 a month. 

According to the PayProp rental index for Q4 of 2024, the province posted the third-slowest rental growth in Q1 2023, at 3.9%, which is close to the national average of 4.2%.

Despite this growth, North West remains the cheapest province for renters in South Africa. The average rent actually fell in cash terms from R5,760 in the previous quarter to R5,738 in Q1 2023. This represents a slowdown after four consecutive quarters of above-average rental growth.

The North West is known for having a significant proportion of student housing, which may contribute to its lower rentals.  A large share of the rental properties in the province fall within the R1,000 to R2,500 price bracket, which is much lower than the national average.

PayProp said the Western Cape continues to lead in high rental prices, with an average rent of R9,872 in Q1 2023, up from R9,737 in the previous quarter.

Year-on-year (YoY) rental growth for the province was 5%, which is above the national average.

The head of data analytics at PayProp, Johette Smuts, said the Western Cape also has the highest proportion of rentals in the upper brackets, with 13.8% of properties costing more than R15,000 a month, the highest in the country.

“If this trend continues, rents in the Western Cape could easily surpass five figures this year,” said Smuts.

Other price brackets above R7,500 are also well represented, making it a province with a large share of high-priced rental properties.

While the Western Cape is still the most expensive province in which to rent, there is potential for the Northern Cape to challenge this position if its current high growth continues.

Despite its strong rental growth, the Western Cape also has some of the very cheapest rentals, with 2.7% of properties costing less than R1,000, above the national average.

The average rentals for property across South Africa has now exceeded R9,000, with the national figure standing at R9,051 in the fourth quarter of 2024. This marks a significant increase in rental costs, driven largely by continued growth across most provinces.

Smuts pointed out that the rental market has fully returned to pre-pandemic levels of growth.

“The rental market finally returned to pre-pandemic levels of growth in the final quarter of last year, and that positive trend continued into the first quarter of 2023,” she said.

The Northern Cape had the highest rental growth rate in Q1 2023, with year-on-year growth of 10.2%. This marks the fourth consecutive quarter in which it has been South Africa’s fastest-growing province in terms of rental prices. The average rent in the Northern Cape increased to R9,248, up from R8,962 in the previous quarter.

While the Northern Cape has seen explosive growth, other provinces also recorded significant increases. KwaZulu-Natal, which entered the top three most expensive provinces last year, saw its average rent rise to R8,801, an increase of 5.0% year-on-year.

Similarly, Limpopo experienced a 6.5% year-on-year increase, reaching an average rent of R7,657, while Mpumalanga's average rent rose by 5.1%, bringing it to R8,268.

However, not all provinces experienced positive growth. The Free State, with the second-lowest rental prices in the country, saw rents fall by 1.1%, bringing the average rent down to R6,358. This marks the third consecutive quarter of negative year-on-year growth in the Free State, a concerning trend for the province.

In addition to rising rents, the issue of tenant arrears is becoming more pronounced. The Free State and North West saw significant increases in tenants falling into arrears, with the Free State's arrears rising from 22.3% to 26.7%, the highest in the country. In the North West, arrears jumped from 16.3% to 22.8%, marking the biggest rise across the country.

However, not all regions saw such negative trends. Limpopo, which had been struggling with high arrears in previous months, saw a notable improvement, with the percentage of tenants in arrears dropping from 21.4% to 18.8%.

Similarly, the Western Cape recorded the lowest tenant arrears percentage in the country, at just 13.9%.

The surge in rental prices across the country, particularly in provinces like the Northern Cape, highlights the ongoing challenge of tenant affordability. As rents continue to climb, especially in high-demand areas, more tenants may struggle to keep up with payments, leading to higher arrears and increasing financial pressure on households.

“Tenant affordability has been highlighted as one of the biggest challenges for the residential rental sector this year. With inflation still a concern, the rental market's upward trajectory could put even more strain on tenants' budgets in 2025.”

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