Neighbourhoods with the most expensive rent in South Africa

Rode & Associates recently released its latest Rode’s Report on the SA Property Market for the third quarter of 2023, revealing the most expensive neighbourhoods for rentals across the country.

Over the past 20 months, interest rates have increased by around 5%, making buying a home increasingly more expensive. As a result, more people may turn to rent instead.

According to the report, apartment vacancy rates on a national level averaged 6.9% in the third quarter of 2023, unchanged from the second quarter of 2023 but lower than 7.8% in the third quarter of 2022.

Provincially, the report shows that the Western Cape continues to stand out with its low flat vacancy rate of 2.9% in the third quarter of 2023, with rental growth at 3.5%. In Gauteng, market-rental growth remained stable at 1.1% yoy, which was the slowest growth rate of all nine provinces.

This is not surprising as flat vacancy rates remain high at 8.6%, albeit better than the 10.1% recorded in the second quarter of 2023. Market-rental growth in KwaZulu-Natal was measured at 3.9% in the second quarter of 2023, the best of the major provinces, albeit slower than the 4.8% growth in the second quarter of 2022, as shown on the chart.

However, Flat vacancy rates remain in the double digits in Durban, a city where service delivery and decaying infrastructure are major issues.

Of course, semigration is boosting the demand for renting and buying properties in the Western Cape, which also has the lowest unemployment rate in the country.

Rode data shows that flats in smaller towns, like Stellenbosch and George, have virtually zero vacancies. The Western Cape also has the best tenants of all nine provinces based on PayProp data, with only 14.4% of tenants in arrears − well below the national average of 18.4%.

Most expensive neighbourhood

Unsurprisingly, the most expensive neighbourhoods in South Africa are located in the Western Cape due to the high demand for rentals.

According to the report, the average rental price for a standard bachelor to a 3-bedroom apartment in Cape Town ranges from R5,937 to R11.857 per month. Upmarket Apartments then range from R8,200 to R14,333, on average, per month.

In Johannesburg, standard apartments range from R5,319 to R8,882, while the upmarket range from R6,064 to R9,610. Standard apartments in Durdan range from R4,229 to R8,165 per month, and upmarket flats from R8,000 to R11,500.

The Rode’s data shows that the Waterfront in Cape Town is the most expensive neighbourhood to rent in South Africa. The report shows that rental for the average upmarket 2-bedroom apartment averages R32,000 per month as of the third quarter of 2023.

The tables below show the top five most expensive neighbourhoods in the three main provinces – Cape Town, Johannesburg, and Durban.

It must be noted that the report highlighted that these neighbourhoods are based on the average prices reported by selective property groups and only services as an indication due to the sample size.

Cape Town

Joburg

Durban

Read: This is what R12,000 per month gets you in Cape Town vs Joburg vs Durban and more