We often get asked whether now is a good time to purchase an investment property, and the short answer is generally yes.
The longer answer, however, revolves around doing one’s homework in terms of finances, the area of your choice, the property of your choice and whether you are truly up to the task of managing and being liable for an investment property.
The Buy-to-Let Market is Booming
When it comes to the data, the good news is that the buy-to-let market is booming. The Western Cape continues to deliver strong rental returns and is also home to more than 23,000 Airbnb’s, making it the short-term letting capital of South Africa.
One notable trend in the buy-to-let space is the rise of ‘rentvestors’- individuals who purchase property in more affordable areas for rental income while continuing to rent homes in locations that suit their lifestyle. This model reflects the growing flexibility with which South Africans approach property ownership.
There has also been a noticeable uptick in joint home loan applications, with more buyers choosing to co-invest in property as a means of boosting affordability, spreading risk, and unlocking opportunities they may not have been able to access alone.
Supply and Demand Favour Investors
PayProp’s Q2 2025 Rental Index highlights a surge in rental growth, reaching its highest point in nearly eight years. The report published in Jun 2025 shows that the average rent has now surpassed the R9,100 high of Q1 ‘25 and that real-terms gains are in fact outstripping inflation.
Looking at provincial trends, PayProp’s latest Rental Index shows that Limpopo (10.9%) and the Western Cape (9.6%) are recording the strongest year-on-year increases as of Q1 ‘25.
Even more affordable provinces showed solid performance. The Free State saw a 7.6% rise in rentals, while KwaZulu-Natal is quickly closing the rental price gap with Gauteng. Although Gauteng posted the weakest growth (2.9%), it remains the third most expensive rental market in the country.
Yields and Opportunities
Rental yields are looking strong, particularly in Cape Town’s Northern Suburbs, Pretoria East and parts of Port Elizabeth.
The African Investor recently reported Cape Town as the country’s top performer for annual growth at 7.7%, while Johannesburg posted the highest gross yields – reaching between 11% and 16% in sought-after areas like Sandton, Hyde Park and Bedfordview.
For those seeking more accessible entry points, areas like Midrand, Bellville and Pretoria East present excellent value. On the luxury end, Cape Town’s Atlantic Seaboard leads the way for properties priced above R3 million. For short-term flips, hotspots include Woodstock, Fourways and Bellville.
Favourable Lending Conditions
Despite high interest rates, financing conditions remain favourable. Banks are offering attractive deals – especially for first-time buyers – with reduced rates, zero-deposit options and extended repayment terms.
ooba Home Loans’ Q2 ‘25 data revealed high levels of home loan activity. The average rate concession stood at -0.67% below prime.
Emerging Trends
Security and lifestyle remain top priorities for tenants, making estates and lifestyle developments increasingly attractive. These often include gyms, walking trails and restaurants, ideal for young professionals and families alike. They’re also easier to manage, thanks to the body corporates handling maintenance.
Co-buying is gaining traction, and while we’re seeing some movement back to Gauteng for job prospects and value, the Western Cape continues to dominate demand – particularly in outlying areas that offer more space and better value.
Let’s not overlook the Eastern Cape, either. The province is drawing interest from older investors and retirees seeking well-appointed rental or holiday properties.
What are your thoughts on South Africa’s property trends? Have you considered buy-to-let, rentvesting, or co-investing? Share your views in the comments below.
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