Amid soaring living costs, high interest rates, and stubborn unemployment, South African tenants are defying the odds. More than 80% remain in good standing on their rent, according to the latest Residential Rental Monitor from the TPN Credit Bureau.
The report shows that 83% of tenants fulfilled their full rental obligations in the first quarter of 2025, with just 17% falling short—either partially or entirely missing payments. This performance marks a continued improvement from the previous quarter, reflecting the resilience and commitment of households to secure their accommodation despite economic uncertainty.
“Tenants have shown strong intent to prioritise rent, which in turn benefits landlords with improved cash flow,” said Waldo Marcus, Managing Director of TPN by MRI Software, in an interview with eNCA.
Approximately 40% of South Africans currently rent their homes. Marcus highlighted that proper tenant vetting and consistent rental collection processes have been critical to the sector’s performance.
Rental Market Outlook: Opportunities for Investors
Despite macroeconomic headwinds, Marcus says the rental property market remains a sound investment, though performance varies significantly across regions and income bands.
Higher-end rental segments, particularly those priced above R12,000 per month, have seen stronger year-on-year growth, with rental escalations reaching up to 5.68%. In contrast, lower-value rentals have struggled, both in terms of payment reliability and escalation potential.
“Investors managing well-maintained properties and engaging positively with tenants tend to see better returns,” Marcus noted. “Location and rental value band remain key factors.”
The Western Cape continues to lead in rental growth, although recent quarters have shown a moderation, signalling a market adjustment after several years of strong performance.
Advice for Landlords and Tenants
With South Africans cautious about entering the property market due to high home prices and stricter lending requirements, demand for rentals is expected to remain strong.
Marcus urged landlords to balance the need for rental increases with the value of retaining consistent, reliable tenants. “Hiking rent too aggressively can backfire. A paying tenant is an asset in this market.”
For tenants, he emphasised the long-term importance of a clean payment history. “A solid rental track record not only keeps a roof over your head, it also strengthens your credit profile and opens the door to future homeownership.”