Landlords are showing increased confidence amid falling interest rates. In contrast to the pandemic period, when many opted to sell their properties, they are now expanding their portfolios, though most continue to hold on to their rental assets.
The number of landlords selling rental properties dropped to a new low in 2024, according to rental payment platform PayProp’s latest state of the rental industry report. Just landlords 30.1% sold, down from 36.2% in 2023 and 50% during the peak of Covid-19.
“Meanwhile, a record 14.6% of landlords were looking to expand their portfolios, up from 10.6% last year. The majority, however, remain in the middle — choosing to maintain their existing holdings,” the report says.
The rental market’s recovery has boosted landlord confidence. According to the index, quarterly rental growth reached 4.9% in the second quarter — the highest since 2017 — and rose further to 5.9% in the fourth quarter, driven by falling interest rates.
“The decline in inflation throughout 2024 signalled a return to real-terms growth for the first time since before the Covid-19 pandemic. Adding to this positive outlook, the SA Reserve Bank cut the repo rate in September after it hovered at a 15-year high for 15 months — easing borrowing costs for landlords,” the report states.
The rise in confidence resulted in higher commissions for agents. The report also highlights that less than half the agents had to reduce their commissions to retain a landlord, compared with 51.1% the previous year, while 31% of the agents were able to increase their commission percentage.
Arrears, rent increases, and vacancy periods all appear to be returning to normal.
— André van Rooyen
head of sales at PayProp,
While many of the sector’s core challenges remained in 2024, the report noted a few notable shifts. Sourcing quality tenants (32.4%) and securing new rental stock (25.9%) remained the top two concerns among property professionals — both showing an increase in frequency compared with previous periods.
Inspections and maintenance took third place at 16.5%, but concerns about arrears and pre-tenancy admin declined, indicating that many agents are already streamlining their processes.
“Most strikingly, managing tenant arrears has fallen to fourth place — a notable shift from its second-place ranking in 2020 and third in 2021, when pandemic-related arrears were still widespread,” the report says.
Property professionals are also increasingly optimistic about the role of technology in their work. Nearly 90% believe automation will have a positive impact on their jobs, with many now viewing it as a more efficient and cost-effective alternative to hiring.
“We’ve never seen agencies this optimistic. Residential rental professionals are committed to the industry and see a positive future ahead. Landlords are still cautious but increasingly confident — with a growing majority planning to hold on to their portfolios. Arrears, rent increases, and vacancy periods all appear to be returning to normal,” says head of sales at PayProp, André van Rooyen.
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