Western Cape rental growth surges to 9.7%

South African rents grew at their fastest pace in more than a year, but the Western Cape is increasingly driving the national rental market higher.

• National rental growth accelerated to 5.2% in Q2 2026, pushing the average South African rent to a record R9,715.
• Western Cape rents surged 9.7% to R12,561, more than R1,100 higher per month than a year earlier.
• Tenant arrears edged up to 16.9%, raising questions about affordability as higher interest rates filter through household finances.

Rental growth hits its strongest pace in over a year

South Africa’s residential rental market gained momentum in the second quarter of 2026, with rental growth accelerating and average rents reaching a new record.

According to the latest PayProp Rental Index, national rental growth increased to 5.2% year on year in Q2, up from 4.8% in the previous quarter and its strongest quarterly performance since early 2025. The average South African rent climbed to R9,715 per month, R497 more than a year earlier.

Momentum also strengthened as the quarter progressed:

• April: rental growth of 4.7%
• Q2 overall: 5.2%
• June: 5.6%
• Average national rent: R9,715

For landlords and property managers, however, the headline growth number tells only part of the story.

Inflation also accelerated during the quarter, reaching 5.0% in June. Although rental growth remained ahead of inflation, the real-terms margin between the two was the smallest recorded since Q3 2024.

That means landlords may be collecting higher rentals, but rising maintenance, operating and property ownership costs are absorbing a greater share of those gains.

And beneath the national number sits an even bigger story: the Western Cape is increasingly pulling away from the rest of South Africa’s rental market.

Western Cape pulls further ahead

The Western Cape was comfortably the country’s standout rental market during Q2.

Rental growth reached 9.7% year on year, the province’s strongest performance since Q4 2024. Average monthly rent climbed to R12,561, more than R1,100 higher than a year earlier.

The Western Cape now commands a significant rental premium over every other province. Average rents are almost R2,000 per month higher than in the Northern Cape, South Africa’s second-most expensive rental market.

But perhaps the most revealing statistic is the Western Cape’s influence on the national numbers. Seven of South Africa’s nine provinces recorded rental growth below the national average during Q2.

Remove the Western Cape from the calculation and national rental growth falls from 5.2% to just 4.3%, below inflation. That highlights just how uneven South Africa’s rental market has become.

The North West was the only other province to outperform the national average, recording annual rental growth of 7.8%.

At the other end of the market, Mpumalanga remained the country’s slowest-growing rental province at 2.3%, although this was an improvement on the previous quarter.

For investors and asset managers, these provincial differences matter. Headline national rental growth does not necessarily reflect the income performance investors can expect from individual markets.

Location, rental demand, affordability, vacancy risk and tenant payment performance remain critical when assessing residential investment returns.

Arrears edge up from record lows

The other number landlords should watch closely is tenant arrears.

Payment performance remained relatively strong during Q2, although the percentage of tenants behind on their rent increased slightly.

The proportion of tenants in arrears rose from 16.7% in Q1 to 16.9% in Q2. That remains the joint-second lowest arrears level recorded by the PayProp Rental Index, so there is no indication yet of widespread rental distress.

But the direction of travel deserves attention. Higher borrowing costs place additional pressure on household budgets, particularly where tenants are also servicing vehicle finance, credit cards, personal loans and other debt.

Changes in interest rates can also take time to filter through to rental payment behaviour. According to PayProp, the impact can emerge six to nine months later, meaning rental professionals should monitor arrears and affordability closely towards the end of the year.

For landlords, strong rental escalation means little if it comes at the expense of tenant affordability, higher vacancies or deteriorating collection rates.

What happens next?

Q2 delivered South Africa’s strongest rental growth in more than a year, but the underlying market is considerably more nuanced than the national 5.2% headline suggests.

Three trends now stand out.

• The Western Cape continues to pull away.
  Rental growth of 9.7% and an average rent of R12,561 underline the strength of demand and the growing premium tenants are paying to live in the province.
• Inflation is catching rental growth.
  Rents are still rising faster than inflation nationally, but the real margin has narrowed considerably, potentially squeezing landlords facing higher maintenance and operating costs.
• Tenant affordability remains the key risk.
  Arrears are still close to historic lows, but the slight increase during Q2 could be an early indicator worth watching as household finances remain under pressure.

For property investors and asset managers, the message is increasingly clear: there is no single South African rental market.

National averages provide a useful benchmark, but returns are being shaped increasingly by provincial and local market fundamentals. And right now, the Western Cape is setting a pace that most of the country is struggling to match.

The full PayProp Rental Index provides further analysis of rental growth, provincial performance, tenant payment behaviour and arrears across South Africa.

Read the full PayProp Rental Index Q2 2026: Rental Index Q2 2026