What is the average rental yield in Johannesburg?

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THE AFRICANVESTOR

A team specialized in real estate investing in African countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Johannesburg. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At The AfricanVestor, we explore the South African real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Johannesburg, Cape Town, and Durban. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What are the different average rental yields across Johannesburg's main neighborhoods?

Johannesburg's rental yields vary significantly across different neighborhoods, with the highest returns found in emerging areas and student hubs.

Sandton, the premium financial district, delivers more conservative yields of 6-8% due to higher property prices, but offers excellent capital growth potential and attracts high-quality tenants including executives and expatriates.

Middle-upper market areas like Rosebank, Fourways, and Bryanston achieve yields of 7-9%, balancing strong rental demand from professionals with moderate property appreciation. These suburbs attract young professionals and families seeking security and convenience.

Mid-range residential areas including Melville and Randburg generate yields of 8-10%, offering good returns while maintaining decent capital growth prospects. These neighborhoods are popular with middle-income families and young professionals.

The highest yields of 10-12% are found in emerging areas like Maboneng and student-focused neighborhoods like Braamfontein, where strong rental demand from university students and young professionals drives returns despite lower property values.

How do yields vary depending on property type, such as apartments, townhouses, or standalone houses?

Property type significantly impacts rental yields in Johannesburg, with smaller units generally delivering higher returns than larger properties.

Studios and bachelor apartments achieve the highest yields of 12-13% across all areas due to strong demand from students and young professionals combined with lower purchase prices. These units are particularly popular in areas near universities and business districts.

One-bedroom apartments deliver yields of 9-10% in city center locations and 10-12% in suburban areas. The suburban premium reflects strong demand from young professionals seeking affordable accommodation outside the city center.

Three-bedroom apartments generate yields of 9-10% in city locations but can reach 12-16% in suburban areas where families prefer more space and better value for money.

Townhouses in suburban areas achieve yields of 10-14%, appealing to families and professionals who value space, security, and community amenities. These properties often attract longer-term tenants, reducing vacancy risks.

Standalone houses in premium suburbs typically yield 8-12%, with lower yields offset by stronger capital appreciation potential and appeal to expatriate families and high-income professionals.

What impact does property size or surface area have on rental returns?

Property size directly affects rental yields in Johannesburg, with smaller units consistently outperforming larger properties on yield metrics.

Smaller units including studios and one-bedroom apartments achieve higher yields because they command higher rent per square meter while requiring lower initial investment. Bachelor apartments under 40 square meters often generate the strongest yields of 12-13%.

Medium-sized apartments of 60-80 square meters typically yield 10-12% in good locations, balancing rental income potential with reasonable purchase prices that appeal to first-time investors.

Larger apartments and townhouses over 100 square meters can reach yields up to 16% in suburban areas where demand from families and professionals is strong, particularly in well-located neighborhoods with good schools and amenities.

It's something we develop in our South Africa property pack.

Standalone houses over 150 square meters generally produce lower yields but offer superior capital appreciation potential, making them suitable for investors prioritizing long-term growth over immediate cash flow.

What are the current purchase prices including transfer fees, legal costs, and taxes for different property categories?

As of September 2025, Johannesburg's average property price stands at ZAR 1.5 million (approximately $81,000), representing a 6% increase year-on-year.

Transfer duty costs vary based on property value, with significant relief for lower-priced properties. Properties up to ZAR 1.1 million incur no transfer duty, while properties between ZAR 1.1-1.5 million pay 3% on the amount above ZAR 1.1 million.

Properties valued between ZAR 1.5-2.5 million pay ZAR 12,000 plus 5% on the amount above ZAR 1.5 million, while properties over ZAR 2.5 million pay ZAR 62,000 plus 8% on the amount above ZAR 2.5 million.

Conveyancing and legal fees typically range from ZAR 17,000-25,000 for properties valued between ZAR 1-2 million, plus VAT. These fees cover attorney costs, bond registration, and property transfer processes.

Additional costs including deeds office fees, property searches, and administrative charges typically add ZAR 3,000-8,000 to the total transaction cost, bringing total acquisition costs to approximately 3-5% of the property value for most investors.

How much do ongoing ownership costs such as municipal rates, levies, insurance, and maintenance eat into returns?

Ongoing ownership costs significantly impact net rental yields in Johannesburg, typically reducing gross yields by 20-30%.

Municipal rates vary by suburb and property valuation, paid monthly to the City of Johannesburg. These rates fund municipal services including water, electricity, refuse collection, and local infrastructure maintenance.

Sectional title properties incur monthly levies ranging from ZAR 1,000-3,000, covering building maintenance, security, insurance, and reserve fund contributions. Levies can increase substantially if reserve funds are low or major maintenance is required.

Property insurance averages ZAR 400-1,000 monthly for apartments and houses, covering building structure, contents, and public liability. Premium areas and higher-value properties command higher insurance costs.

General maintenance costs should be budgeted at 1-2% of property value annually, covering repairs, painting, appliance replacement, and routine upkeep to maintain rental appeal and property value.

These combined costs typically consume 20-30% of gross rental income, making it crucial to factor ongoing expenses into investment calculations to determine realistic net yields.

What does the mortgage picture look like right now, and how does financing affect potential net yields?

As of August 2025, South Africa's prime lending rate stands at 10.75%, following recent rate cuts that have improved property affordability and stimulated buyer activity.

Local banks typically offer loan-to-value ratios up to 90% for South African citizens, while non-residents usually qualify for 50-70% financing depending on their financial profile and the lending institution's policies.

For a ZAR 1.6 million property purchase, buyers typically need gross monthly income of approximately ZAR 54,200 to qualify for bond financing, based on current lending criteria and debt-to-income ratios.

Recent interest rate cuts have improved affordability and encouraged property investment, but mortgage repayments still significantly impact net yields. Investors must carefully calculate financing costs against rental income to ensure positive cash flow.

Mortgage financing typically reduces net yields by 6-8% compared to cash purchases, but leveraging allows investors to acquire multiple properties and potentially achieve higher overall returns through portfolio diversification and capital appreciation.

What are typical rental prices achieved for different types of properties in popular areas?

Rental prices in Johannesburg vary significantly based on property type, location, and target market, with strong demand across all segments.

Property Type	Area	Monthly Rent (ZAR)
Studio/Bachelor	All areas	2,500-5,000
1-bedroom Apartment	City Center	7,000-9,000
1-bedroom Apartment	Suburbs	5,000-7,000
3-bedroom Apartment	City Center	12,000-18,000
3-bedroom Apartment	Suburbs	9,000-14,000
Townhouse	Suburbs	7,000-15,000
House	Premium suburbs	10,000+

Studios and bachelor apartments command ZAR 2,500-5,000 monthly across all areas, with student hubs and areas near universities achieving the higher end of this range due to consistent demand.

One-bedroom apartments in city center locations achieve ZAR 7,000-9,000 monthly, appealing to young professionals working in Sandton and the CBD, while suburban one-bedroom units rent for ZAR 5,000-7,000.

Three-bedroom apartments generate ZAR 12,000-18,000 in city center locations and ZAR 9,000-14,000 in suburbs, with the suburban market offering better value for families and professionals.

Who are the main renter profiles in Johannesburg, and what kinds of properties do they prefer?

Johannesburg's rental market serves diverse tenant profiles, each with distinct property preferences and rental requirements.

Students represent a major renter segment, preferring studios and small apartments in areas like Braamfontein and Maboneng due to proximity to universities, affordable rents, and vibrant social environments. This segment typically seeks furnished or semi-furnished units.

Young professionals form another key segment, favoring one-bedroom apartments in city center locations like Sandton and Rosebank for easy access to business districts, public transport, and entertainment venues.

Families typically seek three-bedroom apartments, townhouses, or houses in suburban areas like Randburg and Fourways, prioritizing security, school proximity, and community amenities over city center convenience.

Expatriates and executives generally prefer premium properties including houses and upscale townhouses in areas like Bryanston and Fourways, often requiring furnished accommodation and willing to pay premium rents for quality and security.

This diverse tenant base ensures consistent rental demand across different property types and price points, supporting stable occupancy rates and regular rent escalations.

What are the average vacancy rates in various suburbs, and how do they affect returns?

Vacancy rates in Johannesburg average 8-12% across the metropolitan area, with significant variations between suburbs and property types.

Premium areas including Bryanston, Fourways, and Sandton record lower vacancy rates below 8% due to strong demand from high-income tenants and limited quality rental stock.

Mid-range suburbs like Randburg, Melville, and Bedfordview typically experience vacancy rates of 8-10%, reflecting balanced supply and demand dynamics and diverse tenant profiles.

Emerging areas and student-focused neighborhoods may experience higher vacancy rates of 10-12% due to seasonal fluctuations and tenant turnover, but this is often offset by competitive rental rates.

Lower vacancy rates directly improve net yields by ensuring consistent rental income, while higher vacancy areas require additional marketing costs and may experience rental income gaps between tenants, affecting overall investment returns.

What are the differences in profitability between short-term rentals and long-term leases?

Short-term rentals through platforms like Airbnb offer higher revenue potential but require more active management and carry additional risks.

1. **Short-term rental advantages:** Well-managed units in Sandton, Rosebank, and Maboneng can achieve significantly higher gross revenue, with top-performing properties earning $1,162+ monthly compared to median earnings of $366 monthly.2. **Peak season performance:** December peak season sees occupancy rates up to 75% with average daily rates of $58+, significantly boosting annual returns for properties in tourist and business areas.3. **Management requirements:** Short-term rentals require constant guest communication, cleaning coordination, maintenance oversight, and dynamic pricing management, increasing operational complexity and costs.4. **Seasonality risks:** Short-term rentals face higher vacancy during off-peak periods and economic downturns, creating income volatility that long-term rentals avoid.5. **Long-term rental stability:** Traditional leases provide steadier income with yields up to 16% in high-demand suburban areas, lower management costs, and reduced vacancy risks outside prime tourist areas.

It's something we develop in our South Africa property pack.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in South Africa versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

How have rental prices and yields changed compared with one year ago and five years ago, and what are the forecasts?

Johannesburg's rental market has shown resilience and growth over recent years, with both prices and yields improving for investors.

Over the past year, property prices have increased approximately 6% while yields have improved by roughly 1% in most areas, driven by rental rate increases of 3-6% annually since 2020.

The five-year picture shows even stronger performance, with some suburbs including Midrand and Braamfontein experiencing property price appreciation of 40-45%, while yields have generally strengthened as rental growth has outpaced property price inflation.

One-year forecast suggests modest price growth of 1.8-3.5% annually, with stable yields maintaining 10-12% in prime rental suburbs as the market matures and infrastructure improvements boost specific areas.

Five-year projections indicate continued steady growth with infrastructural upgrades and urban development projects likely to benefit specific neighborhoods, while yields should remain competitive compared to other investment options.

Ten-year outlook suggests Johannesburg will maintain its position as a strong rental investment destination, with yields potentially compressing slightly in premium areas but remaining attractive compared to developed markets globally.

How does Johannesburg's rental yield performance compare with other large African or global cities?

Johannesburg significantly outperforms most major cities globally in terms of rental yields, making it an attractive destination for yield-focused investors.

Johannesburg's average gross rental yield of 11.4% for apartments substantially exceeds Cape Town's 9.4% and Durban's 10.7%, positioning it as South Africa's premier rental investment destination.

Compared to other major African cities, Johannesburg's yields are competitive or superior, offering investors seeking consistent cash flow an attractive alternative to lower-yielding markets.

Global comparison reveals Johannesburg's significant yield advantage over prominent international investor hubs, which typically yield 4-8%, making it particularly appealing for investors prioritizing current income over capital appreciation.

It's something we develop in our South Africa property pack.

This yield premium reflects Johannesburg's emerging market status, currency considerations, and strong local rental demand, though investors must factor in currency risk and market liquidity when comparing to developed markets.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. The AfricanVestor - Average Rent Johannesburg
2. The AfricanVestor - Best Areas Johannesburg
3. Global Property Guide - South Africa Price History
4. The AfricanVestor - Johannesburg Property Market Trends
5. Burger Huyser Attorneys - Property Transfer Costs
6. Private Property - Interest Rate Drop May 2025
7. AirROI - Johannesburg Short-term Rental Report
8. Global Property Guide - South Africa Rental Yields
9. The AfricanVestor - South Africa Property Forecast
10. The AfricanVestor - South Africa Real Estate Market