Demand for rentals rising

CHECKS: TENANTS IN HIGH RISK BRACKET UP

- Liesl Peyper

With high interest rates and rising living costs, more South Africans are being pushed into the rental market – a trend that has worked in favour of landlords, who have seen improved rental returns in 2025. According to the first edition of the 2025 Rode Report, high interest rates remain a key driver of rental demand, discouraging many would-be homebuyers from entering the property market.

"This will continue to push some potential buyers to opt for renting instead," the report noted.

Since September 2024, residential rentals have consistently grown faster than inflation. In the first quarter of 2025, nominal rental growth ranged between 1.2% and 5.4% across South Africa.

Three provinces recorded rental increases above the inflation rate, with the Western Cape leading at 5.4%. However, affordability remains a key constraint that could limit landlords' ability to raise rents further this year, the Rode Report states.

Applicant risk rising With household budgets under strain, rental applicants are becoming riskier.