Investors are rushing to buy these South African properties

Multifamily rental housing is emerging as one of South Africa’s most resilient and investable property sectors, supported by stable demand, improving economic conditions, and consistently high occupancy levels.

These insights were shared at a recent South African Multifamily Residential Rental Association (SAMRRA) institutional capital breakfast for the multifamily sector, held in partnership with Absa.

Positive data was presented by Rode Publications & Media chief economist Kobus Lamprecht, who outlined improving macroeconomic conditions and their impact on property markets.

He pointed to easing power supply constraints, improving sentiment from ratings agencies, stronger commodity prices and a firmer rand as factors supporting property fundamentals.

Lamprecht also shared early findings from the ongoing Rode and SAMRRA collaboration, which is tracking the performance of members’ multifamily portfolios on a quarterly basis, starting in August 2025.

The survey currently covers around 60,000 residential units, making it the most comprehensive dataset available for the multifamily sector. Two-thirds are in suburban areas and one-third in CBDs.

The portfolios are predominantly Grade A, purpose-built rental assets, owned and managed by institutional investors.

Vacancy rates across SAMRRA members’ portfolios have remained stable and are lower than those of non-SAMRRA apartments.

SAMRRA’s occupancies remained above 95% for the three quarters tracked, reflecting the impact of more modern stock, dedicated amenities and professional management at scale.

Location influenced vacancy outcomes, with variations evident between CBD-based and suburban developments, which show slightly lower vacancy levels.

Nationally, apartment rental growth averaged 3.6% in 2025, close to consumer inflation, with the decline in interest rates constraining rental growth.

However, the same interest rate environment is supporting capital values, contributing to overall market stability. The Western Cape continues to outperform, with rental growth outstripping inflation.

Rental apartment vacancy rates in the province are consistently low across both SAMRRA–managed and non-SAMRRA-managed stock.

Lamprecht said the Western Cape is still a small multifamily housing market in the SAMRRA sample compared to Gauteng, but is expected to grow.

Real estate investors eye multifamily rental properties

Absa CIB’s managing executive for real estate, Somaya Joshua, noted the asset class’s defensive qualities and strategic importance.

“Multifamily rental housing is becoming one of the most resilient, investable and socially impactful asset classes in South Africa,” Joshua said.

“It aligns with national priorities such as urbanisation, affordability, and inclusive growth – and Absa remains committed to backing this sector across economic cycles.”

Joshua added that multifamily rental housing is increasingly becoming an important component of Absa’s real estate portfolio.

From an investor perspective, Sanlam Investments Property Impact Fund’s Kamogelo Leeuw highlighted the scale of opportunity underpinning the sector.

Sanlam has identified a housing shortfall of approximately 3.7 million units within the ‘missing middle’ market alone, while delivery rates of low-cost housing have declined sharply in recent years.

The missing middle, defined as households earning between R5,750 and R36,000 per month, represents up to 30% of South African households and more than 60% of the country’s tax base.

“Multifamily rental housing provides a scalable, repeatable model that links stable, needs-based demand with long-term institutional capital,” Leeuw said.

“It can act as an anchor asset within integrated precincts, support inner city regeneration and densification, and create pathways for long-term household wealth creation.”

SAMRRA CEO Palesa Mkhize noted that the organisation was established to help institutional investors better understand and engage with multifamily residential as an investable asset class.

“While some investors have been active in this space for decades, for others it is still relatively new,” Mkhize explained.

“What is clear is that multifamily rental housing is growing rapidly and is increasingly recognised as a core component of South Africa’s real estate landscape.”

She added that credible, consistent data is essential to support informed investment decisions as the sector continues to mature.

SAMRRA’s collaboration with Rode aims to address data gaps in the South African multifamily rental housing market.

“The research we are developing with Rode is still in its early stages, but it already demonstrates the strength and resilience of professionally managed portfolios,” Mkhize said.

“We look forward to expanding this data set further and continuing to support investors, lenders and developers as this asset class grows.”