Average Annual Rental Increase In South Africa

What is Annual Rental?

Annual Rent means the rent payable by the Tenant to the Landlord during each respective year of the Term (or any further term) beginning with the Initial Rent.


Average Annual Rental Increase In South Africa

The PayProp Rental Index Annual Market Report for 2021 reports a welcome uptick in rental growth in Q4 2021. The average residential rent increased by 0.8% year on year, from R7,854 per month in Q4 2020 to R7,906 in Q4 2021.

The rental payment processor said this compares favorably with year-on-year growth rates of 0.5%, 0.4%, and 0.2% observed in the first three quarters of 2021.

PayProp head of data analytics, Johette Smuts, said it is a promising sign of things to come. “In December, the average rent increased by 1.5% year on year (YoY) – the fastest rise since July 2020. Rental growth of 0.3% and 0.6% was recorded in October and November respectively.”

Arrears return to normal range

In 2021, both the percentage of tenants in arrears as well as the average arrears percentage (the percentage they owed in outstanding rental payments) showed consistent improvement. At the end of 2021, only 18.4% of tenants were in arrears, which is even lower than the pre-pandemic level of 19.4% seen in Q1 2020.

Except for a slight increase in Q4, the average arrears percentage improved similarly. “A possible explanation for the Q4 exception could be that tenants held back some of their December rent to afford increased expenses during the festive season,” said Smuts. This metric measured 82.7% in Q4, still above the more normal 78.5% seen in pre-pandemic Q1 2020.

Consumers advised watching rising interest rates

Nationally, tenants spent 45.3% of their income on debt repayments in Q4 2021, up from 40% the year before. A further 29% was spent on rent, in line with the position the year before. Overall, this left tenants with 25.7% of their take-home pay as disposable income to cover everyday expenses, down from 30.9% the year before – largely due to increased spending on debt repayments, PayProp said.

Smuts said that the lower interest rate might have given tenants a false sense of financial optimism. “With the lower cost of credit, it might be that the increase in the debt-to-income ratio was due to tenants taking on more debt – something that could soon prove problematic in the rising interest rate environment.”

Provincial metrics

In Gauteng, rents declined by 2% year-on-year in Q4 2021 – the third consecutive quarter of negative year-on-year growth in the province, and the lowest growth recorded in any province during the quarter.

The province dropped from the second most expensive province in Q4 2020 to the fourth most expensive in Q4 2021, behind the Western Cape, KwaZulu-Natal, and the Northern Cape. The average rent in Gauteng during the last quarter of 2021 was R8,253, still above the national average of R7,906, PayProp said.

Rent in the Western Cape increased by 1.7% from Q4 2020 to Q4 2021, ending with an average rent of R9,413. The Western Cape also outperformed all other provinces in both arrears metrics. Just 15.1% of tenants were in arrears in Q4 2021, down from 17.2% in Q1 and coming in below the 18.4% of tenants nationwide.

In the Free State, 23.7% of tenants were in arrears in Q4, the most out of all the provinces but in line with the pre-pandemic figure of 23.3% in Q1 2020.

There was good news for landlords in KwaZulu-Natal with the average rent in the fourth quarter hitting R8,286, an increase of 1.9% year on year. In terms of arrears, 21.8% of tenants in the province were in arrears in Q4 2021, in line with pre-pandemic levels of 21.7%.

Smuts said that whilst 2021 was a challenging year for tenants, landlords, and property practitioners alike, it is encouraging to see that rental growth ticked up in the last quarter, showing promise of a stronger performance in 2022.

“In addition, tenant financial health seems to be much improved following the economic shock of Covid-19. However, consumers should be on guard against the rising interest rate, which might leave those with high debt feeling the pinch.”

Here’s how much people are paying for rent across the country:

Eastern Cape

The average rent in the Eastern Cape increased by 2.8% between Q4 2020 and Q4 2021, outperforming, as it did in Q1 and Q2, the national average (0.8%). Nevertheless, the average rent in the area was still just R6,407 at the end of 2021 – the second lowest after the North West said PayProp.

The Eastern Cape houses the country’s highest percentage of tenants renting for R1,000 to R2,500 pm. One in eight rentals in the province falls within this price bracket, and nationally, more than a third of all rentals managed through PayProp in this price bracket are in the Eastern Cape, it said.

As is the case nationally, the R5,000 to R7,500 price range is the most populous in the province, with 3 in 10 rentals falling in this bracket.

Free State

Rents in the Free State declined by 0.2% from Q4 2020 to Q4 2021. The province experienced four quarters of negative year-on-year growth, said PayProp. The average rent in the final quarter of 2021 was R6,512 per month.

Over two-thirds of the Free State’s rental contracts were for between R2,500 and R7,500, split evenly between the two price categories included in this range, it said.


Gauteng rents declined by 2% year-on-year in Q4 2021 – the third consecutive quarter of negative YoY growth in the province, and the lowest growth recorded in any province during the quarter said PayProp.

The average rent during the last quarter of 2021 was R8,253, still above the national average of R7,906.

“Gauteng dropped from the second most expensive province in Q4 2020 to fourth in Q4 2021. 38.5% of rentals in Gauteng were priced between R5,000 and R7,500. The province has the highest density of rentals in this price band of any province. 45% of rents were above R7,500 in Q4 2021.”


Good news for landlords in KwaZulu-Natal: the average rent in the fourth quarter hit R8 386, overtaking Gauteng to claim the spot of the second-most expensive province after the Western Cape. Average rents increased by 1.9% year on year, comfortably higher than the national average of 0.8%, said the property expert.

The province’s rent distribution closely matched the national pattern in Q4. Just over a third of rents fell within the R5,000 – R7,500 price range, with 17.9% and 20.3% falling in the categories below and above respectively.

“KwaZulu-Natal is also a hotspot for luxury rental properties: 9.2% of the province’s rentals cost over R15,000 per month, the second-highest percentage in this price bracket after the Western Cape.”


Rental growth in Limpopo has shown a remarkable turnaround in 2021. After fourteen consecutive quarters of year-on-year declines, the province posted positive growth from Q2 onwards. During the last quarter of 2021, rents were up 3.7% from the same quarter the year before, the second-highest year-on-year growth rate across all provinces after Mpumalanga, said PayProp.

In absolute terms, however, Limpopo still has some catching up to do. Its average monthly rent of R7,168 was more than R700 below the national average in Q4, it said.

Just over a third of rents in the province were priced between R5,000 and R7,500 per month. Another 27.9% fell between R2,500 and R5,000.


The average Mpumalanga rent in Q4 2021 was R7,791 – 3.8% more than the same quarter the year before. Although this was still below the nationwide figure, the province enjoyed the highest year-on-year growth out of all nine provinces, with positive growth in all four quarters, said PayProp.

The most populous price band for the quarter was R5,000 – R7,500, with 34.7% of rents falling into this category. 21.2% of rents were priced between R2,500 and R5,000, and another 20.8% between R7,500 and R10,000, it said.

North West

Rents in the North West increased by 1.8% year on year to R5 382 in Q4 2021 – still the lowest in the country, but with a large number of student rentals in the province, this is not surprising, said PayProp.

“Thanks to the large proportion of student housing in our figures, this metric also skews low. More than half of the rentals in the province were priced between R2,500 and R5,000. Just under 20% were in the R5,000 – R7,500 band – the second most populous price category in the province.”

Northern Cape

The Northern Cape leapfrogged Gauteng to claim the spot of the third most expensive province in the country in Q4 2021. The average rent in the province rose 3% year on year to R8,287, R381 more than the nationwide average, PayProp said.

“The Northern Cape’s most populous (median) rental price band was R5,000 – R7,500, with just under 30% of rentals in this category. The province also skews on the expensive side: 47.6% of all rentals there cost at least R7 500 per month, while just 1.7% cost less than R2,500.”

Western Cape

Rents in the Western Cape increased by 1.7% from Q4 2020 to Q4 2021, PayProps’ data shows. The Western Cape remained the most expensive province with an average rent of R9 413 in Q4 2021.

“A third of rents in the province were priced between R5,000 and R7,500, with 12.2% of rentals more expensive than R15,000 – the highest concentration of high-priced rentals in this bracket in the country. 47.1% of all properties in this price band were in the Western Cape.”

What is a fair rental increase in South Africa?

The rate of escalation of rent per year. Generally between about 10-15% per year is considered reasonable • How often or under what conditions you can see your property.

What are the most a landlord can raise your rent in South Africa?

(usually 10%)

In terms of South African property law, there are no limits to the amount by which a landlord can increase the rent on a property, but in practice, most leases contain a clause stipulating that the annual increase will be a specified percentage (usually 10%) at the expiry of a twelve-month period.