Alarm bells for property in South Africa’s richest province

Gauteng’s rental market is not keeping up with the growth experienced in other provinces, with another period of slow growth recorded in the first quarter of 2025.

PayProp’s Rental Index for Q1 2025 revealed that rental growth in Gauteng was below average in every quarter of 2024, finishing the year at 3.4%.

In Q1 2025, it fell even further to 2.9% – the second lowest in the country. This brought the average rent in Gauteng to R9,201.

While this remains the third-highest in South Africa, it is only R258 more than a year ago and only R31 ahead of fourth-placed KwaZulu-Natal.

“Unless rental growth turns around in Gauteng, it could easily lose its place on the podium this year,” PayProp warned.

There is some good news for the province’s rental market, as arrears in Gauteng are still well below the national average.

PayProp stated that 15.6% of tenants owed rent, down from 16.3% in Q4 and the second-lowest share in South Africa.

However, the report noted that Gauteng tenants in arrears owe an above-average 86.0% of rent. This is down compared to last quarter’s 89.2%, but still the second highest in South Africa.

These factors risk Gauteng falling behind the faster-growing provinces of South Africa in their rental markets.

In Q1 2025, residential rents experienced their strongest growth in nearly eight years, at 5.6%. The average rent in SA is now well above R9,000 and continues to rise.

Apart from Gauteng, the weakest-performing provinces in Q4 2024 all experienced higher rental growth in Q1. 

Rode’s Report for the first quarter of 2025 found that Gauteng’s rental growth was the slowest among South Africa’s provinces.

According to Rode, rental growth in Gauteng averaged 1.2% in the first quarter, which was slower than the 2% growth recorded throughout 2024. 

In addition, Gauteng’s average vacancy rate rose to 8.2% in the first quarter was 6.4% in the fourth quarter of 2024 

Gauteng’s rental growth in Q1 2025 compared to the other provinces can be seen in the graph below, courtesy of Rode.

Good news for buyers

Rode’s Q1 2025 report further showed that, in Johannesburg, nominal house prices in April 2025 grew by 1.8%, which is an improvement from the growth of roughly 1% recorded in 2024. 

“Prices in the city have struggled for many years, implying there is plenty of room for recovery,” it said.

“Johannesburg has some of the most affordable properties in the country, but buying here comes with risk, as we know all the problems it faces (think governance and infrastructure issues).”

However, Landsdowne Property Group founder and CEO Jonathan Kohler recently stated that this is the ideal time to buy property in Johannesburg, as it has reached the bottom of its property cycle.

Kohler explained that prices in Johannesburg are more accessible than in other metros. “With freehold homes especially, there’s real value if you’re looking to settle down,” he said.

“Many buyers are shifting to secure estates, which opens opportunities in suburbs that are still central but less competitive.”

“With Johannesburg offering solid value and interest rates on the decline, now may just be the right moment to make your move.”

Pam Golding CEO, Dr Andrew Golding, also recently noted a rise in demand for Joburg property.

“A recent assessment of web searches on our website reveals some notable trends regarding locations attracting high interest,” Golding said. 

“While Cape Town retains top spot for searches on the Pam Golding Properties website, Gauteng locations such as Bryanston and Sandton overall account for an increasing number of web searches.” 

For the six-month period from August 2024 to January 2025, seven of the top 20 searches were for suburbs in Gauteng, with Bryanston and Sandton in second and third place behind Cape Town.

Golding said Gauteng locations accounted for nearly a third of all the top 20 searches during this six-month period.

This is compared with the first quarter of 2024, when Gauteng accounted for only five of the top 20 searches on Pam Golding, with Bryanston in fifth place and Sandton seventh.