Research shows strong investment case for South Africa’s residential rental property market
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- 18 March 2025
The investment merits of South Africa’s residential rental market are strong and bolstered by robust demand, demographic shifts and urbanisation trends. Research from the South African Multifamily Residential Rental Association (SAMRRA) underscores the resilience of this sector and highlights key opportunities for investors.
As a founding member of SAMRRA, Divercity Property Group, is pleased to share highlights of its research and data, and the latest market intelligence about the residential rental sector in South Africa, a sector with exciting potential that we have long recognised.
Significant Demand
SAMRRA’s most recent research further highlights the sector’s strength. South Africa has an extensive rental housing market, with approximately 4.5 million households renting their homes. Notably, around 15% of these households live in apartments, demonstrating the appeal of multifamily rental options.
Over the past five years, the apartment rental segment has grown by 9%, resulting in an estimated 54,000 new rental units entering the market.
Strong Performance in Residential Rentals
The association surveyed its 13 members, including property investors and managers representing over 75,000 rental units across 550 properties, collectively valued at over R72 billion.
The findings revealed:
• Occupancy rates between 96.5% and 98.5%.
• Rental collection rates exceeding 98% in December 2024.
These metrics reaffirm the resilience and performance of the residential rental sector, making it a compelling option for investors.
Why Rental Housing?
Renting is an attractive option for many South Africans, and especially when they have access affordable, quality and well-located options. This is due to its flexibility, lower upfront costs and maintenance-free living. Tenants benefit from access to prime locations, seamlessly connected to commercial and social amenity, without the long-term financial commitment of homeownership, making the rental model a preferred housing solution with many. This, in turn, fuels sustained demand for conveniently located, quality residential units.
Divercity: Leading the Charge in Affordable Rentals
As one of South Africa’s leading investors in affordable, well-located residential precincts, Divercity is committed to delivering strong returns but also to expanding access to quality rental housing in prime urban locations.
Institutional investors are increasingly drawn to South Africa’s residential rental sector, thanks to enhanced data transparency and proven market resilience. Early movers like Divercity have already capitalised on the rising demand, emerging as a prime vehicle for accessing and expanding the residential rental sector.
Additionally, Divercity’s exemplifies the potential of the sector to deliver both financial returns and social impact through accessible, affordable quality housing.
A sector on the rise
The research from SAMRRA and real-world performance data make it clear: South Africa’s residential rental market is a strong, sustainable investment opportunity.
With high occupancy rates, strong rental collections and a growing tenant base, built-to-rent residential developments present a compelling investment case.