According to the latest PayProp Rental Index the national average rental in South Africa for the first quarter of 2020 was R7 786. However, average rentals vary widely from one province to another – from a low of just R5 222 in North West to a high of R9 171 in the Western Cape.
In between are the average rental costs for the other provinces: R6 012 for the Eastern Cape; R6 414 in Free State; R6 963 in Limpopo; R7 439 in Mpumulanga; R8 101 in Northern Cape; R8 241 in KwaZulu-Natal; and R8 328 in Gauteng.
Within the provinces, rental costs differ widely from one location to another, with most cities significantly more pricey than rural areas. And within cities rental costs – even for standard rather than luxury units - also vary considerably between suburbs.
In Johannesburg, according to Rode and Associates’ report on the state of the property market for the first quarter of 2020, the mean rental for bachelor units is R4 166. However, in the southern suburbs, bachelor flats can be rented for around R2 300 a month, whereas in Greenside the average rental is R7 200 and rises to R7 750 in Sandton.
The mean rent for three-bedroom units in Johannesburg is R8 250, with the lowest rental costs in Yeoville at R4 800. Sandton South and Sandton Central have the highest rental costs at R13 250.
In Pretoria, rental costs range from R3 500 for bachelor units in Silverton to R8 500 for three-bedroom units in Pretoria East suburbs like Menlo Park and Lynwood.
In Cape Town, rental costs vary enormously, with the lowest average rent of R4 167 paid for bachelor units in the Goodwood/Parow area. Camps Bay, Clifton and Bantry Bay boast the most expensive rentals at an average of R23 500 for three-bedroom units.
On the Garden Route, George rental costs range from R3 650 for bachelor units in George South, to R6 500 for three-bedroom units in Bo-Dorp and three-bedroom freestanding homes in Loerie Park can be rented for around R13 000 a month.
Durban’s rental costs range from an average of R4 000 for bachelor units in Pinetown up to R20 000 for three-bedroom units in the North Coast areas of La Lucia, uMhlanga and Ballito.
The Rode Report appears to have little data on rental costs in this province, with Port Elizabeth average rental costs varying from R4 100 in Central to R5 500 in Kabega Park.
In East London, the average rental costs for Gonubie range from R3 300 for bachelor units to R8 500 for three-bedroom units.
Bloemfontein’s average rental costs vary from R2 575 for bachelor units in the CBD to R6 500 for three-bedroom units in Langenhoven Park.
In Polokwane, average rental costs range from R3 000 for bachelor units in Central and Eden Park, to R6 800 for three-bedroom units in Penina Park and Ivy Park.
Rental costs under pressure
According to the PayProp rental index and Rode’s report, high vacancy rates have led to slower rental growth over the past two years, and the Covid-19 pandemic is bound to exacerbate this problem.
Rode’s report says: “The reason for the lower rental increases is primarily a huge increase in new rental stock combined with weakening demand. A welcome sign for the oversupplied market is that new completions have declined considerably since the second quarter of 2019, while developers have also slowed the planning of new units.
“Flat vacancy rates will likely rise more in the short term as the shrinking economy, now exacerbated by Covid-19, puts significant financial pressure on many tenants. Tenants who have no extra funds and are directly affected by a loss of income from the virus, will come under most pressure.
“Some landlords and tenants could negotiate to delay rental payments, but landlords also have bonds to service, which will make such concessions difficult to negotiate. No doubt, rentals will come under increasing pressure in the wake of rising vacancies.”