This is according to the latest PayProp Rental Index. Average rent rose to R9 218, up R433 from the same quarter last year. Crucially, growth stayed well above inflation, keeping landlords ahead in real terms.
At the same time, tenant arrears dropped to just 16.9% nationally - the lowest ever recorded by the Index - underscoring the overall strength of tenant finances in managed rentals.
“Rental growth above inflation and arrears at record lows show that the market remains healthy,” says van Rooyen of PayProp. “Even with signs of cooling, landlords and agents can be confident tenants are still meeting their commitments.”
Growth slows in big markets, surges in smaller provinces
The national slowdown was largely driven by South Africa’s three biggest rental markets:
- Gauteng posted muted annual growth of just 2.4%.
- KwaZulu-Natal rose 3.6%.
- Western Cape, while still the top performer among the majors, eased to 7.3%, down from 9.6% in Q1.
In contrast, smaller provinces continued to shine. Limpopo led the country for the third quarter in a row with a striking 12.5% increase, pushing average rents to R9 145, close behind KZN. At this pace, Limpopo could soon overtake Gauteng and KZN to become one of the three priciest provinces for tenants.
The Northern Cape also broke new ground, with average rents topping R10 000 for the first time on the back of solid 7.3% growth. Elsewhere, the Eastern Cape posted 5.7%, and the Free State achieved a healthy 7.7% despite a small quarter-on-quarter dip. Mpumalanga remained under pressure, with growth almost flat at 0.1%, its third sub-1% result in four quarters.
Arrears reach historic low
Tenant finances proved resilient despite earlier increases in fuel and electricity costs. Arrears fell to 16.9%, and tenants owing money now average 73.7% of monthly rent - another record low.
Low inflation and a slower pace of rental escalation are helping keep rent levels sustainable. However, the typical rental applicant now spends 52.1% of their income on debt repayments, a factor landlords should monitor when screening tenants.
“Even if national growth eases further, record-low arrears show a solid foundation,” van Rooyen says. “For property professionals, the key is adapting to local conditions - digging deeper for opportunities in slower markets and applying robust vetting where demand is surging.”
Guidance for new landlords
For first-time property investors, 2025 presents significant opportunities alongside new challenges. With evolving tenant expectations, updated legal frameworks, and increased competition, success depends on preparation and professionalism.
The Rental Housing Act (RHA) of 1999 remains the cornerstone of residential letting in South Africa. Key requirements include:
- Written lease agreements detailing rent, deposits, maintenance, notice, and termination terms.
- Security deposits placed in interest-bearing accounts and refunded – less any legitimate deductions – within 7–14 days of lease termination.
- Maintenance obligations, ensuring the property is safe, habitable, and structurally sound, with urgent repairs handled promptly.
The Rental Housing Tribunal offers free dispute resolution, but good communication and compliance are the best prevention strategies.
Preparing tenants and landlords for a competitive market
To secure a rental, prospective tenants need:
- A solid credit record,
- Proof of income and affordability, and
- A clean background check.
Agents from Seeff Property Group note that landlords also value a proven payment history and references from previous landlords.
With demand often exceeding supply - and many rentals never formally advertised - tenants should keep documents ready and act fast when opportunities arise.
Even with growth moderating, South Africa’s rental sector remains on firm ground. For landlords, the message is to stay informed, price realistically, vet carefully, and maintain good tenant relationships to sustain strong returns.
