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New-Year tenant moves demand smarter rental strategies
- Seasonal tenant churn is rising as affordability, location and debt pressures reshape rental decisions.
- Automatic rent hikes risk vacancies; value, pricing and retention now matter more than escalation.
- Professional management and transparent fees are becoming critical to portfolio performance.
Managing tenant churn in a price sensitive market
The start of the year is traditionally one of the busiest periods in South Africa’s rental market. Families relocate closer to schools, professionals move for work, retirees downscale, and many tenants reassess their living arrangements in search of better value and financial breathing room.
For landlords, this “New-Year shuffle” has often been treated as an opportunity for routine annual rent increases. But in the current economic environment, that approach is increasingly risky.
“As tempting as it is to push through automatic escalations, the reality is that affordability has become the primary decision driver for tenants,” says Ephraim Zaslansky, Director at FIRZT Realty. “With household budgets under pressure and more rental options available, landlords who price themselves out of the market could face vacancies that cost far more than a moderate increase would ever recover.”
Zaslansky points to PayProp data showing that South African tenants spend close to 48% of net income on debt repayments and a further 31% on rent. Even with interest rates easing, most households are still highly leveraged and exposed to rising costs such as school fees, medical aid, municipal tariffs and insurance.
“Tenants are actively trying to reduce fixed monthly commitments so they can improve cash flow, pay down debt or save for home ownership,” he says. “Housing is one of the few major expenses they can still control, which means price sensitivity is acute right now.”
From a management perspective, this makes retention as important as replacement.
Challenges and Solutions in the 2026 Rental Cycle
Key challenges:
- Affordability pressure
Tenants are more cost-conscious and quicker to move if rentals feel out of line with market value. - Increased supply in urban nodes
New developments near transport corridors and business hubs, particularly in Gauteng and the Western Cape, have widened choice and intensified competition. - Vacancy risk
Even one month without a tenant can wipe out the financial benefit of an annual escalation. - Rising compliance and management complexity
Legal, financial and regulatory requirements are placing greater operational burdens on landlords and agents.
Smart solutions:
- Market-related pricing
Rental levels must be benchmarked accurately against comparable stock, suburb by suburb. - Value enhancement instead of price pushing
Well-maintained units, fibre readiness, prepaid utilities, security, energy-saving features and parking now influence leasing speed more than marginal price differences. - Flexible lease structures
Staggered escalations, longer leases or inclusion of certain utilities can improve retention. - Professional portfolio management
Data-driven pricing, proactive marketing and rigorous tenant screening reduce risk and downtime.
The Role of Agents: From Rent Collectors to Asset Managers
The shifting rental landscape is also changing how agencies structure their services and fees.
According to Michelle Dickens, CEO of PayProp, the industry is moving toward more transparent, service-based fee models that reflect the real cost and value of professional management.
“The cost of delivering compliant, well-managed rental services has increased, and so has the complexity,” she explains. “By separating out services such as tenant screening, inspections, deposit administration and compliance, agencies can price fairly and transparently, instead of hiding everything inside a single commission line.”
This evolution is being supported by data. PayProp’s State of the Rental Industry research shows that a growing majority of agencies now fully manage at least half of their portfolios, a shift that improves operational efficiency and service quality for both landlords and tenants.
“Market-related rent is about balance,” Dickens adds. “Too high, and tenants leave. Too low, and landlords struggle to maintain assets. Professional management helps find that equilibrium and protect long-term portfolio value.”
How agents can manage rental portfolios more effectively
In a high-churn, affordability-constrained environment, top-performing rental agents focus on five priorities:
- Data-led pricing
Use live market analytics, not last year’s escalations, to set rentals that attract and retain quality tenants. - Proactive tenant retention
Engage tenants before renewal, understand their financial pressures, and structure realistic increases that reduce turnover. - Asset optimisation
Advise landlords on small upgrades with high return on appeal: security, energy efficiency, connectivity and maintenance presentation. - Transparent fee communication
Clearly explain management, inspection and compliance costs so landlords understand the value being delivered. - Vacancy-minimisation strategies
Strong marketing, fast turnaround times, accurate tenant vetting and efficient onboarding protect cash flow.
Strategy Beats Escalation
The 2026 rental market is no longer one where landlords can rely on automatic annual increases to drive returns. Tenant affordability, rising supply in key nodes and heightened financial pressure mean that value, pricing discipline and professional management now determine performance.
As FIRZT and PayProp both highlight, the winning strategy is not to squeeze the tenant, but to strengthen the proposition: market-related rentals, well-maintained properties, transparent fees and skilled agents who manage portfolios as income-producing assets, not just listings.
In a year of heightened tenant mobility, the landlords and agents who adapt will enjoy lower vacancies, steadier cash flow and stronger long-term portfolio resilience.
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