Rental prices in South Africa saw their sharpest increase in over a year, with the Western Cape leading the charge. Nationally, rents rose by 5.2% in the second quarter of 2026, pushing the average monthly rent to an all-time high of R9,715.
In the Western Cape, rents jumped by 9.7%, reaching an average of R12,561 per month, over R1,100 more than the previous year. Meanwhile, the percentage of tenants in arrears inched up to 16.9%, sparking concerns about affordability as higher interest rates impact household finances.
National Rental Growth Accelerates
The PayProp Rental Index reveals that national rental growth hit 5.2% year-on-year in Q2, up from 4.8% in Q1, marking the strongest performance since early 2025. The average rent across South Africa climbed to R9,715, an increase of R497 compared to the previous year.
Rental growth gained momentum throughout the quarter, starting at 4.7% in April, reaching 5.2% overall in Q2, and peaking at 5.6% in June. This trend highlights a consistent rise in rental prices during the period.
Western Cape Leads the Market
The Western Cape stood out as the top-performing rental market in Q2, with a 9.7% year-on-year growth rate, its best since Q4 2024. Average rents in the province soared to R12,561, over R1,100 higher than the previous year.
The Western Cape now boasts significantly higher rents than any other province, with averages nearly R2,000 more than the Northern Cape. Its influence on national figures is substantial, as seven out of nine provinces recorded rental growth below the national average in Q2.
Excluding the Western Cape, national rental growth drops from 5.2% to 4.3%, falling below inflation. This shows the province’s significant impact on the overall rental market.
Tenant Arrears and Affordability Concerns
Tenant arrears rose slightly from 16.7% in Q1 to 16.9% in Q2, remaining the second-lowest level recorded by the PayProp Rental Index. Higher borrowing costs are putting pressure on household budgets, especially for tenants managing multiple debts like vehicle finance, credit cards, and personal loans.
Inflation also rose during the quarter, reaching 5.0% in June, narrowing the gap with rental growth to its smallest since Q3 2024. This could squeeze landlords facing higher maintenance and operating costs.
Provincial Variations Highlight Market Complexity
The North West was the only other province to surpass the national average, with 7.8% annual rental growth. In contrast, Mpumalanga remained the slowest-growing province at 2.3%, though this was an improvement from the previous quarter. These differences illustrate the diverse nature of South Africa‘s rental market.
