Understanding which cities are most in demand and why, is particularly useful for property investors and tenants who want to make informed decisions on where they will purchase a buy-to-let, or live in property.
For investors, purchasing in the large metropolitans such as Johannesburg, Cape Town, Pretoria, Durban, Port Elizabeth and Bloemfontein, means there is likely to be a constant demand for rentals. These areas will ensure a good rental return provided the property suits the needs of the types of tenants the investor’s wish to attract.
Highest rental demand metro's
1. Johannesburg
Beyond the Johannesburg CBD, the broader region has a particularly high rental demand in the suburbs, especially Sandton and Rosebank. While the city itself has a lively economy, the busier, more professional hubs attract a large number of international conglomerates and local corporates that need to be in headquartered in central business districts. This is particularly true of Sandton, nicknamed "Africa's richest square mile," and the rental environment as a result is excellent. With its modern apartments, proximity to top schools, shopping centres, and good transport links, Sandton is always a pull-card.
Key factors driving demand
- Jobs in finance, technology, and corporates.
- Close to business districts and commercial centres.
- Well-developed infrastructure and public transport systems.
2. Cape Town
Its magnificent natural beauty, lifestyle amenities, and active tourism make Cape Town a most desirable city in which to live, especially in areas such as the City Bowl, Sea Point, and Claremont. One of the main reasons for the city’s popularity is the large number of educational institutions on offer, including the University of Cape Town. These draw large numbers of students and academic staff, who prefer to rent given that many will be non-permanent residents.
Key factors driving demand
- There is a booming tourist industry and varied lifestyle choices.
- High demand from students and academic professionals.
- Expanding tech and creative sectors.
3. Pretoria
Pretoria is the administrative capital city of the country, and as such there is a high demand for rentals from government institutions, universities, and embassy staff. In terms of popularity, Hatfield, Brooklyn, and Menlo Park are suburbs in high demand by students who want to study at the University of Pretoria, and professionals serving the government or the diplomatic services. Pretoria also has well-established infrastructure, which, when coupled with the fairly low cost of living compared to other major cities like Johannesburg or Cape Town, makes it a particularly attractive option for renters.
Key factors driving demand
- The presence of government institutions and embassies.
- High student population from universities and colleges.
- Affordable living when compared to all other major cities.
4. Durban
Another city in great demand for rentals is Durban, particularly Umhlanga, Morningside, Ballito and Berea. The Durban economy is driven largely by the Dube Trade Port, an important logistics hub to the country, where surrounding areas also feature and attract manufacturing and tourism operators. Alongside is a great climate, magnificent beaches, and a diverse culture, which also attracts many retirees, young families, and professionals.
Key factors driving demand
- Economic opportunities in logistics and manufacturing.
- Appeal as a warm coastal city.
- A strong tourism industry.
5. Port Elizabeth (Gqeberha)
Rental demand is rising in Port Elizabeth. The city's relative affordability and fast-growing status as a new business hub are among the reasons that have increased its attractiveness to investors and renters. It hosts higher learning institutions like Nelson Mandela University, which creates demand from students and lecturers for rental properties. Popular suburbs include Summerstrand, Walmer, and Central.
Key factors driving demand
- The cost of living is affordable.
- Growing status as a business and logistics hub.
- Rental demand from students and academic professionals.
6. Bloemfontein
Steady rental demand is growing in Bloemfontein, the judicial capital, particularly in suburbs close to educational institutions and government offices. The city is home to the University of the Free State and other tertiary institutions, creating a strong need for student accommodation. Additionally Bloemfontein is a regional economic centre, so rentals need to cater for professionals and government employees and their families.
Key factors driving demand
- Demand for student accommodation is driven by educational institutions.
- Government offices and judicial institutions are present.
- Lower cost of living and housing affordability.
Understanding rental demand across major cities helps when making strategic property decisions. Whether an investor looking for consistent returns or a tenant seeking a semi-permanent home, it is always a good idea to ensure that the city or suburb you select, ticks all your boxes, and understanding the dynamics that are in play in those areas.
