Home / News  / This is Johannesburg’s current rental picture

This is Johannesburg’s current rental picture

johannesburg2 resize

Property rentals in Gauteng, the province with a substantial segment of the rental market in South Africa, could begin showing improved growth soon, says Tobie Fourie, national rentals manager for Chas Everitt International.

“Rentals are currently escalating by an average of 5.81% a year,” says Fourie. “What is also good news is that the vacancy levels are stabilising at around 6%, which indicates a good balance between supply and demand. However, the percentage of tenants in good standing has recently dropped to 81.32% and a worrying 20.37% now fall into the grace period and paid late categories.”

Fourie says good rental increases were seen in certain parts of Johannesburg in the past two years. These suburbs include Randburg, Fourways, Lonehill, Sandton, Kensington, Rosebank, Roodepoort and Sunninghill. By way of contrast, several other areas such as City Deep and Dobsonville saw no growth or experienced a rental decline during the same period.

Painting the rental picturepainter man resize

There are an estimated 590,000 rental properties in Johannesburg, and property types comprise:

  • Clusters: 25,473
  • Flats: 115,263
  • Flatlet/Rooms: 80,889
  • Freehold: 216,960
  • Informal: 115,905
  • Not specified: 5,259
  • Townhouses: 29,283

Fourie draws comparisons between rental properties in sectional title developments and those in freehold properties.

Sectional titlesectional-title-balconies-resize

“Rental price trends for different property types in the Johannesburg area since 2016 are important to investors and agents trying to set market-related rentals or rental increases for various property types and sizes. From Q4 2016, sectional title rentals showed a slight upward trend until Q3 2017. Thereafter, they declined again and by Q2 2018 were back at the same level as in Q3 2016.”

The average rentals per number of bedrooms:

  • Less than 2 bedrooms: R5,258 (2016), R5,238 (2017), R5,446 (2018)
  • 2 bedrooms: R7,114 (2016), R7,252 (2017), R7,006 (2018)
  • More than 2 bedrooms: R9,459 (2016), R9,688 (2017), R9,394 (2018)


“From Q3 2016 to Q3 2017, freehold property rentals were effectively static. There was a small upward swing then but it was short lived and from Q4 2017 rentals began to decline and by Q2 2018 were basically back at the same level as at the start of Q3 2016,” says Fourie.

The average rentals per number of bedrooms:

  • Less than 3 bedrooms: R4,890 (2016), R5,169 (2017), R5,478 (2018)
  • 3 bedrooms: R10,149 (2016), R10,560 (2017), R10,176 (2018)
  • More than 3 bedrooms: R13,141 (2016), R13,316 (2017), R11,653 (2018)

In terms of rental price distribution, figures that enable investors and agents to determine the busiest segments of the market in terms of rentals and sizes of property, the figures for sectional title properties were:

  • Less than 2 bedrooms: More than 30% in the R5,000/month range
  • 2 bedrooms: 30% in the R7,000/month range
  • More than 2 bedrooms: 20% in the R9,000/month range

For freehold properties, the rental price distribution figures were:

  • Less than 3 bedrooms: More than 40% in the R4,000/month range
  • 3 bedrooms: Less than 20% in the R6,000/month to R8,000/month range

“The rental trend for the Gauteng region was positive for the entire period between Q1 2016 to Q1 2018, although the escalation percentages varied quite widely,” says Fourie. “This shows the benefits of longer-term investment when it comes to rental property.”

The average rentals were:

2016 Q1: R6,578.44

2016 Q2: R6,661.66

2016 Q3: R6,741.59

2016 Q4: R6,802.94

2017 Q1: R6,887.74

2017 Q2: R6,904.93

2017 Q3: R6,928.15

2017 Q4: R7,015.93

2018 Q1: R7,287.93

Rental escalations were:

2016 Q1: 5.51%

2016 Q2: 5.52%

2016 Q3: 5.64%

2016 Q4: 5.59%

2017 Q1: 4.70%

2017 Q2: 3.65%

2017 Q3: 2.77%

2017 Q4: 3.13%

2018 Q1: 5.81%

Room for growth13 flamboyant str-26

Referring to the number of rooms in a rental property, Fourie says “the majority of rental properties have one to two rooms, but there is a vast variety in property sizes and number of rooms”.

Drawing on data from Chas Everitt International, StatsSA and the TPN Credit Bureau, Fourie profiles property types, sizes/number of rooms, and tenant demographics.

Property size is based on the number of rooms (not ONLY bedrooms, but excluding bathrooms and kitchens):

  • Rooms 1 to 2: 57,95%
  • Rooms 3: 10,33%
  • Rooms 4: 13,23%
  • Rooms 5: 8,60%
  • Rooms 6-20: 4,94%

“It is helpful to know the demographics of tenants when renting homes in some areas and markets,” says Fourie. “The current overall breakdown is black African 83,41%, coloured 3,55%, Indian or Asian 3,47%, white 8,77% and other 0,80%.”

1-person rentalsHopeful tenant.resize

Turning to household size, Fourie indicates that knowing how many people live in a home is helpful to landlords/investors and rental property agents in determining their main target market segments. One-person households are currently in the majority in the Johannesburg rental market:

  • 1 person: 38,55%
  • 2 people: 27,01%
  • 3 people: 16,65%
  • 4 people: 9,71%
  • 5 people: 4,30%
  • 6+ people: 3,79%

Payment performanceDefaulting tenant resize

Fourie says the TPN rental payment index assists investors and agents to determine what they should be seeing in terms of tenants making full rental payments on time, rental paid late, partial rental payment and whether they are achieving results above, below or in line with the average. The latest index figures for Johannesburg are:

  • Paid on Time (POT): 64,52%
  • Grace Period (GP): 6,37%
  • Paid Late (PL): 11,75%
  • Partial Payment: (PP): 10,88%
  • Did not pay (DNP): 6,49%

“Tenants in Good Standing (POT+GP+PL) = 82,64%. This figure is below the national level of 83,98%.”

Words: Blake Wilkins


David A Steynberg, managing editor and director of HomeTimes, has more than 10 years of experience as both a journalist and editor, having headed up Business Day’s HomeFront supplement, SAPOA’s range of four printed titles, digimags Asset in Africa and the South African Planning Institute’s official title, Planning Africa, as well as B2B titles, Building Africa and Water, Sewage & Effluent magazines. He began his career at Farmer’s Weekly magazine before moving on to People Magazine where he was awarded two Excellence Awards for Best Real Life feature as well as Writer of the Year runner-up. He is also a past fellow of the International Women’s Media Foundation.

Review overview