SA’s Best Buy-to-Let Hotspots for 2025

Top 3 Takeaway

  • Cape Town, Johannesburg, and KZN offer high yields and tight vacancies, ideal for rental investors.
  • Suburbs near universities, transit hubs, and lifestyle precincts are outperforming.
  • The current interest rate climate favours strategic buy-to-let opportunities.

South Africa’s rental market is enjoying its strongest growth in years, driven by sustained demand and tight supply a rare alignment that spells opportunity for savvy investors.

High rental yields and low vacancies make this a prime time for portfolio expansion,” says Bradd Bendall, National Head of Sales at BetterBond.

The PayProp Rental Index (Q1 2025) reports a 5.6% year-on-year rental increase the best in recent years. Meanwhile, TPN’s Q3 2024 data shows national vacancy rates at just 5.4%, the lowest since 2016. According to the Global Property Guide, the country’s average gross rental yield stood at a healthy 10.36% in Q2 2025.

But where exactly should investors be looking?

Top Suburbs by Province

Western Cape

Cape Town’s Northern Pulse and Student Core
The Western Cape leads the nation with the lowest vacancy rate of just 1.07%, driven by semigration and limited supply.

The average rent in the province stands at R11,285, with a 9.6% annual increase.

A semigration hotspot, the Western Cape continues to benefit from sustained rental demand,” says Bendall.

Top Suburbs

  • Woodstock, Observatory & Salt River - Popular with students and young professionals, these areas offer rental yields of 8 -11%, bolstered by developments like Peak Studios in Observatory with 98% occupancy.
  • Bellville - Family-friendly and affordable, with yields of up to 11%. “These properties offer space, value, and access to key amenities,” adds Bendall.

Gauteng

High Yields in SA’s Economic Engine
Gauteng continues to deliver some of the highest gross yields nationally, ranging from 11% to 16%, with average monthly rents topping R9,200.

Urban density, student demand, and economic activity are driving performance across Gauteng,” says Bendall.

Top Suburbs

  • Sandton & Rosebank - Sought-after for their luxury lifestyle, these hubs attract professionals, expats, and families. Sectional title units with security and convenience perform particularly well.
  • Bedfordview - Secure estates here boast 90%+ occupancy, thanks to consistent demand.
  • Braamfontein, Menlyn, Brooklyn, Hatfield & Arcadia (Pretoria) - Student and young professional demand keeps yields between 9–11%. “These areas offer consistent returns and are shielded from long vacancies,” Bendall notes.

KwaZulu-Natal

Coastal Demand Meets Development Boom
KZN’s vacancy rate dropped to 7.12% in Q3 2024, with Umhlanga and Ballito at the heart of the rental surge.

The North Coast is evolving into one of South Africa’s top investment corridors,” explains Bendall. “Lifestyle precincts like Sibaya are attracting long-term tenants and short-term visitors alike.”

Top Suburbs

  • Umhlanga & Ballito - Popular with both residents and tourists, with developments like The Pearls showing up to 90% occupancy.
  • Sibaya Coastal Precinct - Offers a mixed-use work-live-play lifestyle with consistent tenant interest and growing investor activity.

What Smart Investors Should Do Now

With interest rates holding steady at 10.75%, the current market offers a sweet spot for buy-to-let investors.

“A well-located property near transport, education, or employment hubs is key to long-term success,” says Bendall. “If you’re planning to invest, the time is now, before rates rise or stock tightens further.”

Time to Invest

From Cape Town’s inner-city student zones to Gauteng’s high-yield nodes and KZN’s booming coastal strip, South Africa is brimming with rental opportunities for informed investors.

If you’re building a portfolio or entering the market for the first time, focus on yield, vacancy rates, and tenant demand and partner with local experts who understand the nuances.

The combination of low vacancies, rising rental income, and steady lending rates makes this one of the best times in recent memory to invest in South African property,” Bendall concludes.

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