Why now is the most profitable time to become a landlord
Have you ever wanted to dip your toes into the world of real estate investments? Real estate experts say that now is the perfect time to do so.
'As South Africa's property landscape enters a new phase of growth and resilience, the rental and property sales markets are aligning to create a golden opportunity for those considering becoming landlords. With robust rental performance, moderating inflation, and consistent housing price appreciation, there has seldom been a better time to venture into residential property investment,' says Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa.
According to the latest PayProp Rental Index for Q1 2025, the national rental market is experiencing its strongest growth in nearly eight years. The average rent in South Africa climbed to R9,132, reflecting an annual increase of 5.6%, the highest quarterly rental growth rate since Q3 2017.
This surge is especially noteworthy when considered alongside low inflation levels, which averaged 3.2% in January and February, and dropped to 2.7% in March. This widened the rental-to-inflation gap, offering landlords real-terms rental growth not seen in years.
Another key factor making now an opportune moment to enter the landlord market is the record low in tenant arrears. Only 17.0% of tenants were in arrears during Q1 2025, matching the lowest level ever recorded by PayProp.
While South Africa's residential rental market is surging, house price growth has been slower and more measured – until recently. The Residential Property Price Index (RPPI) published by Stats SA for January 2025 shows that annual national house price inflation was 5.2%, a modest rise from the revised 5.1% in December 2024.
This comes after a period of subdued growth in 2023, when the average annual increase hovered around 1.8%, following even lower rates through much of 2022. However, the momentum is beginning to shift upward.
'This gradual but promising upturn in house prices means that savvy investors can still enter the market while prices remain relatively affordable, before sharper increases potentially take hold later in the year. The current climate offers a compelling mix of capital growth potential and robust rental income streams, particularly in high-demand metros such as Cape Town, Johannesburg, and Tshwane,' says Goslett.
What's more, the South African Reserve Bank's decision to cut the prime lending rate by 25 basis points earlier this year – and further reductions hinted at for later in 2025 –improves affordability for prospective property buyers. Lower interest rates reduce bond repayments, enhancing cash flow potential and return on investment for buy-to-let properties.
'We encourage prospective landlords to speak with one of our property professionals to explore investment opportunities tailored to your financial goals. Whether you're looking to grow your wealth through rental income, benefit from capital gains, or secure a retirement nest egg, 2025 is your moment to make the move,' Goslett concludes.
Issued by: Kayla Ferguson
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Citizen
10 hours ago
- The Citizen
Numsa considers downing tools as wage talks with Gautrain deadlock
Numsa has criticised Gautrain management's wage proposal as out of touch with South Africa's high cost of living, calling for a 7% raise instead. National Union of Metalworkers of South Africa (Numsa) members march to Comair offices in Kempton Park on 15 March 2022. Picture: Michel Bega As Gautrain celebrates its 15th anniversary on Tuesday, the National Union of Metalworkers of South Africa (Numsa) says it will be balloting its members to determine whether it will be going ahead with a strike at the Gauteng rapid rail network. This comes after wage increase negotiations with Bombela Operating Company – which manages the Gautrain – reached a deadlock. Numsa rejects 4.2% increase offer Numsa spokesperson Phakamile Hlubi-Majola said in a statement that the union was granted a certificate to strike, which means it can give Gautrain 48 hour notice to down tools. 'Our members rejected the employer's offer of [a] 4.2% wage increase [for] Gautrain workers because this is not a meaningful increase,' Hlubi-Majola said. 'We are demanding [a] 7% increase across the board. While management clings to the Consumer Price Index as a benchmark, workers are living in a country where the cost of survival has skyrocketed far beyond the consumer price index (CPI),' she added. Question of affordability According to the Pietermaritzburg Economic Justice & Dignity Group, the average food basket now costs an estimated R5 443. Citing this information released by the non-profit organisation in June, Hlubi-Majola said Gautrain's offer is paltry. She said the lowest-paid Gautrain worker, a cleaner, earns approximately R9 000 and can't be expected to absorb the increases with a 4.2% increase. ALSO READ: Numsa to meet Nissan SA over reported Rosslyn plant closure Workers 'deserve a living wage' This is not just a wage dispute, Hlubi-Majola said; it's a question of dignity and fairness. 'The demands we are making are reasonable given that the cost of living is extremely high. This is why we say CPI increases are not enough – workers at Gautrain deserve a living wage,' she said. 'Gautrain's world-class performance with over 7.9 million passengers annually and a 95% punctuality rate is only made possible by the very workers now being told to 'tighten their belts' while executives remain insulated in air-conditioned offices. 'The same executives are rewarded with generous packages, when it is ordinary workers whose labour is exploited in order to generate Gautrain's world-class performance.' Hlubi-Majola said Numsa's demand for a 7% increase is a modest, reasonable adjustment that reflects the real cost of living in South Africa today. Rather than a luxury, it's a lifeline, she said. Numsa calls for meaningful offer 'We call on the Bombela Operating Company and the Gautrain Management Agency to put a meaningful offer on the table. Workers are not asking for miracles; they are asking for economic justice. We all have a responsibility to end wage inequality, and that includes the bosses at Gautrain.' Gautrain, which was launched in 2010, has completed over 200 million passenger trips and employs approximately 1 200 people. NOW READ: Outa calls for 'open cards' amid Gautrain changes
IOL News
15 hours ago
- IOL News
Stats SA and Capitec Bank CEO discuss South Africa's unemployment crisis
A street vendor pushes his trolley in the Pretoria CBD. Stats SA has defended its unemployment statistics after questions were raised about whether the informal economy was taken into consideration. Stats SA has defended the integrity of its official unemployment statistics following a high-level meeting with Capitec Bank CEO Gerrie Fourie, who recently questioned the credibility of the country's 32.9% unemployment rate. The meeting, held in Stellenbosch last week, brought together Minister in the Presidency Khumbudzo Ntshavheni, Statistician-General Risenga Maluleke, senior Stats SA officials, and National Treasury representatives to address comments made by Fourie, who suggested South Africa's real unemployment rate might be closer to 10%, based on Capitec's observations of informal economic activity. In response, Stats SA gave what it described as a 'comprehensive presentation' of the methodology used in its Quarterly Labour Force Survey (QLFS), which it said adheres to International Labour Organization (ILO) standards and includes informal and self-employed workers. 'Stats SA methods remain robust,' Maluleke said. 'We do not fix statistics to feel better about our reality. We reflect that reality so the country can make evidence‑based decisions to change it.' Fourie, who welcomed the engagement, said: 'We are committed to working with the government and the private sector to help South Africa grow. The informal market is vibrant and dynamic, but we believe this growth will only be achieved once the informal economy is properly understood and supported with the right policy frameworks, infrastructure, funding, and skills development.' Maluleke acknowledged that Stats SA was open to further improving the quality of labour market data, including exploring the development of a statistical register for small and informal businesses. 'We have listened to them, and we need to investigate the issues of a statistical register for small business,' he said. The meeting followed Minister Ntshavheni's comments during Stats SA's Budget Vote debate in Parliament. She said more consultations were expected with other stakeholders, including in the short-term insurance sector. In a joint commitment, Stats SA and National Treasury affirmed their support for stronger data systems and continued engagement with both public and private stakeholders. 'Future updates will be communicated as developments occur,' the statement read. Stats SA stated it would conduct "methodological tests and innovations" in the coming years to refine labour indicators and ensure better capture of the informal economy within the National Statistics System. THE MERCURY
The Herald
a day ago
- The Herald
Stats SA must be protected to preserve democracy, says deputy minister
Deputy minister in the presidency Nonceba Mhlauli has sounded the alarm over the chronic underfunding and vacancies plaguing Stats SA, warning that the institution's ability to uphold democracy and drive development is at stake. Speaking during the Stats SA budget vote debate in parliament, Mhlauli said investing in the agency was not optional. 'A well-funded, capacitated Stats SA is not a luxury. It is an essential endowment to our democracy and our developmental state. Reliable data is the bedrock of reducing inequality, targeting services, and measuring progress,' she said. Her remarks come amid growing concerns over the agency's operational constraints. Last month, Stats SA presented a dire picture to parliament's portfolio committee on planning, monitoring and evaluation, citing financial challenges, ICT system deficiencies and a high number of unfilled posts. Statistician-general Risenga Maluleke cautioned that if these issues persist the quality of the agency's work would deteriorate. 'If the situation doesn't change, it will have serious consequences and [the] quality will start imploding,' Maluleke said. 'In the end, Stats SA might have to close.' Mhlauli echoed these concerns, stating: 'Inadequate funding and persistent vacancies at Stats SA risk weakening one of the very tools meant to strengthen our country.' She also sought to clarify the institution's role in light of recent public debates about the accuracy of unemployment figures. 'Stats SA does not create unemployment. It measures it. Stats SA does not make policy. It informs it. It is for us — the policymakers, the lawmakers, the executive — to use these insights wisely,' she said. The deputy minister highlighted the strengthening of Stats SA's mandate through the Statistics Amendment Act signed into law in December last year. 'The new act enables improved co-ordination across government and enshrines the professional independence required for statistical credibility,' she said. Mhlauli noted that national statistics agencies face evolving global challenges such as public mistrust in institutions, misinformation, declining survey response rates, digital exclusion and the growing cost of data collection. 'In this environment, we must adapt by embracing digital tools, investing in data literacy among our people, strengthening partnerships with community leaders and reaffirming the independence and credibility of our statistical systems,' she said. Minister in the presidency Khumbudzo Ntshavheni added that over the next five years, Stats SA will embark on a process of reinvention to modernise its products and processes. Among its upcoming initiatives, the agency plans to research the use of artificial intelligence (AI) in producing official statistics, introduce web-based data collection in economic statistics programmes, apply data science to big and alternative data sources and explore the use of cloud technology. 'These reforms are necessary to ensure that Stats SA remains relevant, agile and accurate in a rapidly changing information environment,' said Mhlauli. TimesLIVE
