The average age of tenants in the South African residential market has crept up and so has their average rental payment, which breached the R9,000 mark in the last quarter of 2024.
According to rental property management company Payprop’s index for the period, 6.8% of tenants were older than 60, compared with 5.8% two years prior, and the number of renters between 20 and 29 dropped one percentage point.
Andre van Rooyen, head of sales at Payprop, said this may be good news for landlords because older tenants were usually more likely to keep up their payments.
“Older people’s lower risk is underpinned by healthy spending metrics. The average 60+ tenant spends 28.5% of their income on rent, just below the national average of 28.7%. Younger renters, however, spend more on rent than any other age group.”
The index shows most tenants are between 30 and 39, but Van Rooyen said many in this bracket were high risk because of the range of demands on their income.
“Tenants in this age group are much more indebted than their 20 — to 29-year-old counterparts, spending 45.8% of their income on repayments. This is the age at which many people start families, which necessarily means taking on new expenses.”
The average rent level rose 5.2% year on year in the quarter, with Limpopo recording the highest increase of 11.1%. The average rent in the province hit nearly R8,800 a month.
Unfortunately, the province has many high-risk tenants who are in arrears
— Andre van Rooyen, PayProp
“Limpopo has posted above-average rental growth in almost every quarter for the past two years, but really took off in Q3 2024, coming in second place with 8.4% growth,” Van Rooyen said.
“The average rent in Limpopo reached R8,797 in Q4, blasting past Mpumalanga to become South Africa’s middle province in terms of average rents. That is R878 more than a year ago.”
The Western Cape remained the most expensive province in which to rent, with the average sitting at more than R11,000.
For the North West, growth in rental prices rose 7.2% to R6,798, still the lowest in the country.
“Unfortunately, the province has many high-risk tenants who are in arrears. At the beginning of 2024, the year started with more tenants in arrears than any other province at 25.7%,” said Van Rooyen.
Following a cut in interest rates by the South African Reserve Bank, property analysts expect to see a surge in activity in the sector this year, including a shift from renting to home-buying.
Bradd Bendall, national head of sales at BetterBond, said the impact of the interest rate cuts at the end of 2024 was expected to be felt in the coming months.
“We expect house prices to lift to record levels now that the prime lending rate has started to drop again after months of holding steady at a 14-year high. House inflation will be particularly pronounced in the metropolitan areas.”
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