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Rental prices hit a sweet spot in Cape Town

Rental prices hit a sweet spot in Cape Town

MAIN IMAGE: Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, Linda Segal of RE/MAX Living, Michael Hauser of RE/MAX Living, Elle Beer of RE/MAX Living


Across the country, it is currently a landlord’s dream market as demand for rental properties continues to climb following every interest rate hike. 

According to PayProp’s Rental Index for Q2 2023, rental prices have risen yearly in every province, while national rental growth has hit the highest level since 2017. The report also states that in the Western Cape, rental prices grew by a reasonably sluggish 2.8% compared to the national average of 4.4%, although the average rent of R9 730 was still the highest in the country.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that demand for the Western Cape remains high, which pushes up property prices. “Based on the performance of the RE/MAX of Southern Africa network during Q3 2023, the Western Cape’s sales totals trumped that of Gauteng’s sales totals, despite it being a smaller region,” he comments.

Speaking further on the increasing demand for the Western Cape, Linda Segal of RE/MAX Living says that “semigration combined with a recovering tourism sector along the Atlantic Seaboard has seen demand drive rentals up by 20% – 35% and more. Affordable listings are snapped up in a matter of days or hours,” she says.

Two years ago, Segal adds that renting an unrenovated 2-bed flat for between R12,000 – R14,000 p/m was possible. “Currently, there are very seldom 2-bed rental units available at this price. Renovated 1-bed flats with parking are now available for R16,000 p/m. One or two years ago, a newly built 2-bed flat could be rented at approximately R20,000 p/m. The 2023-2024 rental for the same unit now approaches on average of R30,000 p/m. It is no longer possible to find cottages or houses to rent for under R25,000 p/m along the Atlantic Seaboard,” says Segal.

Noticing a similar trend, Michael Hauser of RE/MAX Living says that the demand for rentals has been pushed up with the rising interest rates. “Added to that is the semigration towards Cape Town and seasonal visitors like the ‘digital nomads’ who flock to the city. As a result, there has been a huge increase in the demand (from about September) for rentals in the price range of R12,000 to R25,000. Our experience shows rental prices have increased by about 20% to 30%. Of course, if a reliable tenant renews a lease on a lowish rental price, we tell landlords to be reasonable with the increases to a max of 8 to 10%,” says Hauser.

Hauser says in the City Bowl area, “you will get a 1-bed apartment in the range from R12,000 to R15,000. Two-bedroom apartments in this area start from R14,000 (basic, with no parking) to R25,000 plus,” he notes.

Speaking into the rental prices in Milnerton and surrounds, Elle Beer of RE/MAX Living says that a R12,000 rental amount would afford you a 2-bed, 72m2 apartment in Milnerton Central, “while the same 2-bed rental property in Century City would range from R14,500 to R18,000. A R15,000- R17,000 rental amount would afford you a 2-bed property in Burgundy Estate.

For R15,000 – R20,000, you could afford a 3-bed free-standing house in Milnerton, although families tend to prefer the gated estate properties for security reasons. R15,000 can also get you a furnished 2-bed home in the Tijgerhof area. Royal Ascot is also popular, with rentals ranging between R13,000 to R18,000 for 2–3-bedroom apartments. Sunset Beach offers furnished accommodations between R15,000 – R25,000,” she notes.

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