Big shift in South Africa’s property market

Younger South Africans are increasingly opting to rent rather than buy, driving demand for rental properties across the country.

Tyson Properties director Murray Haywood said the rental market is heating up in major centres across South Africa, driven by younger people.

“Like young professionals the world over, newcomers to real estate are looking for convenience, amenities and flexibility, rather than first-time home ownership,” he said. “As a result, demand for rentals is growing and the market is at its busiest since 2018.”

Haywood, who serves as Tyson Properties’ director for Gauteng and KwaZulu-Natal and national group rental manager, outlined the factors influencing this growth.

Beyond the high costs of running a house or the consistent maintenance expense, the younger generation also wants to be fluid and follow careers rather than be bogged down by bricks and mortar. 

He explained that these younger South Africans prefer to put their spare funds into more liquid financial investments rather than buying property.

He noted that Gauteng, South Africa’s economic hub and repository of jobs in corporates, finance and technology, is the most vibrant rental market. 

Suburbs like Sandton and Rosebank are particularly popular, as they offer trendy apartments, proximity to top schools, shopping centres and good transport links.

“The ‘rental’ asset class is growing nationally. Agencies like Tyson Properties are making a concerted effort to set up rental books and establish rental portfolios within their franchise networks,” he said. 

“We use credible entities establishing easy and up-to-date lease agreements, do thorough background credit checks and are now consistently training our agents so that they know what to look for when renting a property and what questions to ask.” 

Aside from Gauteng, Cape Town is also a popular area for renters, with the city’s natural beauty, sophisticated lifestyle, tourism and expanding tech and creative sectors as major drawcards.

Cape Town

Tyson Properties’ rental manager in Cape Town, Southern Suburbs, Stephen Adamo, noted that areas such as Bishopscourt, Constantia, and Newlands are particularly popular.

“The advantages of renting in these areas vary. Often, we have clients who are moving from up country or relocating to South Africa for the first time from another country,” Adamo said. 

“Renting allows these clients to understand the areas better before settling down and buying a property.”

He noted that renting a property worth over R15 million tends to work out cheaper than purchasing for those looking to rent larger properties. 

In these cases, renting allows more flexibility, especially if the renter needs to be closer to educational institutions, work, or beaches.

Even amongst locals, the rental market in Cape Town and the Southern Suburbs is growing for a myriad of reasons.

Adamo highlighted access to basic services such as electricity, water, and transport, security, privacy, and proximity to top schools and places of work as attractive features for these areas.

“There are also still a few properties in the Southern Suburbs that provide clients with an abundance of space without compromising on location or accessibility,” he said. 

“The market is growing year on year with an 8% to 10% escalation in rentals per year.” 

He said those looking for properties to rent can expect increased demand for high-end apartments in city centres and very competitive rental prices in desirable areas.

Tips for renters

Tyson Properties provides 10 tips for South Africans looking to rent a property, rather than buy.

• Do your research – Understand the rental market in your chosen area and each particular neighbourhood. Make sure that you know the average pricing and what is expected for extra amenities and services.
• Prep the paperwork – Get pre-approved by supplying the agent with the necessary supporting documentation: payslips, ID, proof of residence and bank statements, which are used in the vetting process. Check the lease agreement and make sure that all terms are clear before signing.
• Inspect the property – Identify maintenance issues and document them before signing up or moving in. Complete a move-in inspection report or ‘snag list’ of items that need to be rectified by the landlord. If repairs are unlikely, document any issues so that, when exiting, you are not liable for damages.
• Know your rights and responsibilities – Familiarise yourself with the Rental Housing Act. Affordability is key, so know your budget. Renting a property includes not only the rental itself but also running costs, utilities, deposits, and other fees.
• Make sure you can meet upfront costs – your deposit, equivalent to a month’s rental, needs to be paid upfront. You may also need to cover application and administration fees, as well as moving costs.
• Keep everything in writing – Keep records of agreements with the landlord as well as all correspondence.
• Understand maintenance responsibilities – Know what falls on you versus what the landlord is responsible for.
• Be a good tenant – Pay your rent on time and follow building rules.
• Have a backup plan in case of unexpected expenses or job changes.

“Decisions need to be made quickly due to high demand, and having the right paperwork on hand will get you over the line ahead of others,” Adamo added.