Top suburbs for buy-to-let investments in South Africa: where to invest now?
With the country's average gross rental yield reaching 10.36% in Q2 2025 and national vacancy rates at their lowest since 2016, conditions are ripe for property investors. Bradd Bendall, BetterBond's National Head of Sales, says investors should look closely at suburbs offering a combination of strong rental yields and low vacancy rates — the clearest indicators of sustainable income and tenant demand.
"South Africa's residential rental market is showing strong growth, with demand outpacing supply in many parts of the country, says Bradd Bendall, BetterBond's National Head of Sales. 'This, coupled with the relatively low prime lending rate, creates ideal conditions for investors looking to expand their buy-to-let portfolios.'
The PayProp Rental Index for Q1 2025 reports a year-on-year rental increase of 5.6%; a performance the report describes as 'the best South Africa's rental market has seen in years'.
When identifying promising suburbs for property investment, Bendall says two key metrics should be top of mind: rental yield and vacancy rate. According to the Global Property Guide, South Africa's average gross rental yield stood at 10.36% in Q2 2025.
Drivers of rental yield
Factors that influence rental yield include location and demand. 'Properties in urban centres, university towns or commercial hubs tend to offer higher rental returns,' says Bendall. 'Not only is the tenant demand usually high, but the rental income is more consistent.'
Different property types can offer stronger rental yields. Apartments and sectional-title units typically require minimal upkeep, making them more cost-effective to maintain. Their lock-up-and-go convenience also appeals to a wide range of tenants. Properties located in areas with reliable service delivery, strong infrastructure, and robust economic activity are consistently in demand.
Long-term leases tend to provide a stable and predictable income stream, while short-term rentals, particularly in popular tourist destinations along the coast, may deliver higher returns, but require more management.
'Consider your investment goals carefully when choosing where to invest in an income-generating property,' advises Bendall. 'Work with estate agents in your preferred area to understand the market and demand. Factor all costs, including levies, rates and maintenance in your calculations when estimating a property's likely rental yield.'
Considering the two metrics - rental yields and vacancy rates - Bendall recommends the following buy-to-let suburbs by province:
Western Cape: TPN reports that the Western Cape recorded its lowest vacancy rate to date in the third quarter of 2024. Vacancy rates dropped to 1.07%, down significantly from the previous low of 1.16% reported in early 2016.
'This low vacancy rate is a combination of high demand and low supply,' explains Bendall. 'A semigration hotspot, many people relocating from other provinces to the Western Cape will rent before they buy.'
The PayProp Rental Index reports that the province also boasts the highest average rent in the country at R11,285, with a 9.6% annual increase that is well above the national average.
In Cape Town, Woodstock, Observatory, and Salt River are top picks for student and young professional renters seeking proximity to universities and commercial centres. Rental yields in these suburbs range between 8% and 11%, with student accommodation developments like Peak Studios in Observatory reporting occupancy rates as high as 98%.
Bellville in Cape Town's northern suburbs is also a strong performer, says Bendall. Popular with young families and young professionals, Bellville enjoys low vacancy rates and rental yields of up to 11%. 'Many of the rental properties in this area are spacious and offer comparative value for money. They are also well-located close to amenities and recreational facilities.
Johannesburg: Gauteng consistently ranks as one of the top-performing provinces for rental income. Research by The African Investor indicates gross rental yields of 11% to 16% in the province, with an average rent of just over R9,200 - the third highest in the country.
Sandton remains one of the most sought after suburbs in the country, with buyers and tenants drawn to a vibrant, cosmopolitan lifestyle. Located within Gauteng's economic hub, Sandton is conveniently located with easy access to airports and other parts of Gauteng.
Sandton's rental market has wide appeal. It attracts young professionals, expatriates and families who want to enjoy the lifestyle it offers. Luxury sectional-title units offering convenience and security are particularly sought after in Sandton and neighbouring Rosebank, notes Bendall.
Bedfordview's rental market has remained resilient, with its secure estates reporting rental occupancy rates consistently above 90%. Investors are also interested in Braamfontein, where a strong demand for student accommodation is seeing rental yields of over 10%.
Similarly, a need for student accommodation is driving rental demand in Pretoria, notes Bendall. Menlyn, Brooklyn, Hatfield and Arcadia are high-demand areas, especially with students and young professionals. 'The combination of low vacancy rates and relatively high rental yields of between 9 and 11%, make these areas a good option for savvy investors.
KwaZulu-Natal: According to TPN's Vacancy Survey Report for Q3 2024, the vacancy rate in KwaZulu-Natal declined to 7.12% by the end of the year, slightly lower than the 7.36% recorded in 2023.
In Durban, Umhlanga and Ballito remain sought-after rental hotspots, offering consistently high rental yields and low vacancy rates. These areas are also popular among tourists and business travellers, with developments such as The Pearls of Umhlanga achieving occupancy rates of up to 90%.
'The North Coast of KwaZulu-Natal is experiencing significant growth, with new developments attracting a range of buyers and investors,' says Bendall. The Sibaya Coastal Precinct, by example, offers a dynamic work-live-play lifestyle and a variety of rental properties designed to meet tenants' changing needs.
Time to invest
With the prime lending rate currently at 10.75%, the climate is favourable for savvy investors looking to secure high-yield rental properties with low vacancy rates.
'A well-located property in areas with strong access to transport, education, and economic opportunities is more likely to deliver solid rental returns and sustained occupancy.' says Bendall. 'Investors would do well to make the most of the current rates environment by investing in property in areas where the demand for rental accommodation is high and sustained.'
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