South Africa’s most expensive province to live in where rent went up by R1,107 in one year

The Western Cape remains South Africa’s most expensive province for renters, with average monthly rent rising by R1,107 year-on-year to a record R12,561.

This was revealed in PayProp’s Q2 2026 rental index, which showed that the gap between South Africa’s best- and worst-performing rental markets continues to widen.

According to the index, population growth and the rising number of households living in rental accommodation are increasing demand for residential rental stock.

There are now 4 million households living in formal rental accommodation, although this figure stagnated between 2024 and 2025.

Another 1 million households, representing 19% of the tenant market, live in informal rental accommodation. This figure grew by 20% between 2024 and 2025.

More households are also generating income by renting out part of their homes. The growth in backyard housing, including houses, flats, and rooms, has added 937,000 rental homes.

This segment now represents 19% of the rental market, and has grown by 25% over the past two years.

Despite the increase in rental stock, the market remains constrained by available supply and tenant affordability.

This is reflected in the fact that the proportion of tenants behind on their payments grew to 16.9% in the second quarter of 2026.

Rental prices increased to R9,715 during the quarter, a new record high. This followed quarterly rental growth of 5.2%, the highest since Q1 2025.

However, CPI inflation also reached 5% in June, above the South African Reserve Bank’s target range. The effects of previous interest rate hikes have also yet to fully filter through to inflation.

Although real rental growth remains positive, PayProp said it was the weakest recorded since Q3 2024, despite the increase in nominal rental growth.

The 5.2% national growth rate also does not mean that rental markets performed strongly across the country.

Growth was driven by South Africa’s two strongest rental markets, with seven of the nine provinces recording growth below the national average.

South Africa’s best and worst performing rental markets

PayProp’s latest index revealed a large disparity in how rental markets across provinces performed. While the Western Cape is delivering its best results yet, other provinces have shown lacklustre growth.

In Q1, average rentals in the Free State fell to their lowest level in South Africa, as the province recorded sub-1% rental growth.

Growth improved in Q2 but remained slow at 3.3%. The only province which saw slower rental growth was Mpumalanga at 2.3%.

This brought the Free State’s average rental price to R7,252 per month, the lowest in South Africa and R427 less than the second-cheapest province, the North West (R7,679).

However, the Free State’s status as the country’s cheapest province in which to rent a home does not mean local tenants can afford it.

In Q2, 28.2% of renters were in arrears, the highest figure PayProp has recorded since the Covid-19 pandemic in Q2 2020.

On the other side of the spectrum, the Western Cape once again emerged as the most expensive province for renters in South Africa.

This comes after the province experienced what PayProp described as a “massive rental growth” of 9.7%, the highest recorded in the province since Q4 2024.

As a result, average rentals reached R12,561, up R1,107 compared to a year ago.

“Average rents here were a massive R1,999 more than in second-placed Northern Cape,” Payprop said.

While one might expect the Western Cape’s rental growth rate to lead to more tenants falling into arrears, there has been no sign of this.

Tenants in arrears fell to 12.3%, the lowest ever recorded for any province in the PayProp Rental Index.