Covid-19 has detrimental effect on rental sector, report shows

Published Mar 23, 2021


Rental growth continued to decline in the final three quarters of last year due to the Covid-19 lockdown devastating the rental market in South Africa.

The information is contained in a PayProp report, which looks at the period from the first quarter to the last of 2020. PayProp is a platform that is automated for payment and reconciliation for the residential rental industry.

The research aims to outline the effects of lockdown on the rental market in South Africa during the coronavirus pandemic last year.

According to the report, the effect of the lockdown on rental growth continued to lower in the fourth quarter of 2020 when growth was measured year on year.

“In November, for the first time since the index launched in 2012, growth was negative with the average rent 0.3% lower than in November 2019,” it said.

The report also states as current lockdown regulations continue to restrict economic growth, this means many consumers will continue to feel financial pressure.

“Affordability will remain an important consideration for prospective tenants in 2021, and rental growth is likely to stay muted.”

Western Cape

The report also states that rent in the Western Cape decreased by R45 or 0.5 percent between Q4 2019 and Q4 2020.

“The province is still the most expensive in which to rent, with tenants paying an average of R9 253 – over R800 more than in Gauteng, the second-most expensive province for tenants.”


According to the report, Gauteng rents remained high throughout the year, and at R8 421. “Rental growth trended downward during the course of the year, mirroring the trend seen in national rental growth. In Q4 this figure was 0.7 percent – sluggish, but still higher than the national average of 0.2 percent.”


The report also states that while rent in KwaZulu-Natal became slightly cheaper between Q1 and Q4 of 2020, albeit only by R9 a month, the province is still third-most expensive in which to rent.


The research showed that in Limpopo, the average rent of R6 909 in Q4 was down 3.3 percent over the same quarter the previous year, making it the worst-performing province in terms of rent growth.


The findings also revealed that the average rent in Mpumalanga in Q4 was R7 504, below the national average of R7 854. By contrast, rental growth was higher than the national average of 0.2 percent at 1.4 percent.

North West

The report states that North West’s average rent remained the cheapest out of all the provinces at R5 286 in Q4. This is mostly due to the lower pricing of student housing. Between Q4 2019 and Q4 2020, average rent declined by 0.6 percent

Free State

According to the report, At R6 525 in Q4, the Free State average rent is currently the third lowest in the country but showed great growth throughout the year.

“The last quarter’s growth of 1.6 percent was the second-highest in South Africa (after the Eastern Cape) and well above the national figure of 0.2 percent.”

Eastern Cape

The Eastern Cape’s average rent, R6 234 in Q4 2020, was the second-lowest out of all the provinces. However, the province’s rental growth was a nation-leading 3.9 percent.

Northern Cape

The reports also noted that while the average rents in the Northern Cape contracted by 2.9 percent between Q4 2019 and Q4 2020, they were still higher than the national average of R7 854.

The report added that growth in the average rent was already slowing before the pandemic – in fact, it was under pressure even before 2020.


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