Which cities in South Africa have the best rental yields?

Authored by the expert who managed and guided the team behind the South Africa Property Pack

Everything you need to know before buying real estate is included in our South Africa Property Pack

Who is the author of this content?

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 South Africa. 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 Cape Town, Johannesburg, 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 is the average gross rental yield in each of the main South African cities?

As of September 2025, Port Elizabeth leads South African cities with exceptional rental yields of 15.8-16.3%.

Pretoria follows closely with an average yield of 15.2%, making it particularly attractive for investors seeking high returns. Johannesburg delivers yields ranging from 9.15% to 16.37%, with a city average of 11.38%, offering the widest spread of investment opportunities.

Cape Town provides more conservative but stable yields between 7.19% and 12.15%, averaging 9-10.54%, reflecting its premium market status. Durban rounds out the major cities with yields ranging from 6% to 13%, averaging around 10.7%, positioning it as a balanced option for investors.

These yields significantly outperform many international markets, making South Africa an attractive destination for property investors seeking strong rental returns.

What is the current average purchase price of apartments and houses in these cities?

Property prices vary dramatically across South African cities, with Cape Town commanding the highest values and smaller cities offering more affordable entry points.

Cape Town leads with one-bedroom apartments ranging from R1.3 million to R3.5 million, while two-bedroom units cost between R1.8 million and R5 million. Houses in Cape Town average R2 million to R2.5 million or more, reflecting the city's premium coastal location and international appeal.

Johannesburg offers more accessible pricing with one-bedroom apartments between R650,000 and R850,000, two-bedroom units from R850,000 to R1.2 million, and houses averaging R1.35 million to R1.5 million. Pretoria shows similar pricing patterns with apartments starting around R1.25 million and houses from R1.25 million upward.

Durban presents a mixed market with one-bedroom apartments from R900,000 to R2.5 million, while luxury two-bedroom units can reach R10 million, and houses range from R4 million to R15 million. Port Elizabeth offers the most affordable entry point with one-bedroom apartments from R850,000 and houses starting around R1.2 million.

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

What are the typical monthly rental rates for different property types in each city?

Monthly rental rates reflect the economic dynamics and living costs of each South African city, with Cape Town commanding premium rents and smaller cities offering more affordable options.

City	1-Bedroom	2-Bedroom	3-Bedroom
Cape Town	R13,564	R18,000	R27,741
Port Elizabeth	R9,766	R13,900	R19,900
Johannesburg	R7,632	R11,000	R15,803
Pretoria	R7,209	R12,550	R13,590
Durban	R6,643	R8,500	R12,764

How high are the property taxes and municipal rates in these different cities?

Property taxes and municipal rates in South African cities typically range from 0.25% to 2% annually, calculated based on the municipal valuation of your property.

Cape Town and Johannesburg generally impose the highest municipal rates due to their extensive infrastructure and services, often reaching 1.5-2% of property value annually. These cities invest heavily in maintenance, security, and municipal services, which justifies the higher rates.

Durban and Port Elizabeth typically charge lower municipal rates, usually falling between 0.25% and 1% annually, making them more cost-effective for property investors concerned about ongoing expenses. Pretoria sits in the middle range, with rates varying by specific suburb and municipal services provided.

Municipal rates fund essential services like water, electricity infrastructure, waste management, and local security, so higher rates often correlate with better municipal services and property maintenance.

What are the average maintenance and management costs for rental properties?

Maintenance and management costs significantly impact your net rental yield, requiring careful budgeting for optimal investment returns.

Annual maintenance costs typically range from 0.5% to 1.5% of your property's value, covering repairs, upkeep, and necessary improvements to maintain rental standards. Properties in coastal areas like Cape Town and Durban often face higher maintenance costs due to salt air and humidity affecting building materials.

Professional property management fees range from 8% to 12% of annual rental income, depending on the level of service provided and the city's competitive landscape. Full-service management including tenant screening, rent collection, maintenance coordination, and legal compliance typically commands the higher end of this range.

Additional costs include building insurance (0.2-0.5% of property value annually), sectional title levies for apartments (R500-R2,000 monthly), and periodic capital improvements that can add 0.5-1% to annual expenses.

What is the historical rental yield trend over the past five years?

South African rental yields have shown consistent improvement over the past five years, rising from approximately 9.5% in 2021 to current levels of 10.36-10.55% nationally by 2025.

This upward trend reflects several market factors including controlled property price growth, steady rental demand, and improved economic stability in key metropolitan areas. Pretoria and Port Elizabeth have experienced the strongest yield improvements, with increases of 2-3 percentage points over the five-year period.

Cape Town has maintained relatively stable yields with modest improvements, while Johannesburg has seen gradual increases driven by urban renewal projects and improved security in key suburbs. Durban's coastal markets have benefited from increased tourism and student accommodation demand, supporting yield growth.

The trend suggests continued strength in the rental market, supported by urbanization, limited new supply in prime areas, and growing demand from young professionals and students across major cities.

What are the current occupancy and vacancy rates for rental properties?

South Africa's rental market shows strong occupancy levels, with a national vacancy rate of just 5.4% as of Q3 2024, the lowest recorded since 2016.

Cape Town, Pretoria, and Johannesburg maintain excellent occupancy rates with vacancies typically between 4% and 6%, indicating strong rental demand and tenant retention. These low vacancy rates support consistent rental income and justify premium rental rates in desirable neighborhoods.

Durban and Port Elizabeth experience slightly higher vacancy rates of 6-9%, which can be seasonal and area-dependent, particularly in coastal suburbs that rely partly on holiday rental demand. However, these rates remain well below concerning levels and support healthy rental markets.

The strong occupancy rates across all major cities reflect South Africa's housing shortage, urbanization trends, and growing rental market maturity, providing confidence for long-term investment strategies.

How fast are property values appreciating annually in these cities?

Property appreciation rates vary significantly across South African cities, with coastal markets leading growth and inland cities showing more modest but steady increases.

Cape Town leads annual appreciation at 6-7% per year, driven by international buyer interest, limited developable land, and strong tourism infrastructure. This appreciation rate supports long-term capital growth alongside attractive rental yields.

Durban follows with 5-6% annual appreciation, while the North Coast areas can achieve up to 10% annually due to development projects and coastal lifestyle appeal. Johannesburg and Pretoria show more conservative appreciation of 3-5% per year, reflecting their mature markets and economic hub status.

These appreciation rates, combined with rental yields, deliver total returns that often exceed 15-20% annually for well-located properties, making South African real estate particularly attractive for international investors seeking both income and capital growth.

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.

What are the top neighborhoods within each city that deliver the strongest rental yields?

Each major South African city offers specific neighborhoods that consistently outperform citywide averages for rental returns.

In Johannesburg, Sandton delivers premium yields due to its financial district status, while Bedfordview and Randburg offer strong returns with excellent security and amenities. These areas attract high-income professionals willing to pay premium rents for convenience and safety.

Cape Town's top-performing areas include the City Bowl for urban professionals, Bellville for affordability with good transport links, Milnerton for coastal lifestyle, Durbanville for family appeal, and the Southern Suburbs for established rental demand. Each area serves different tenant demographics while maintaining strong occupancy rates.

Durban's strongest yields come from Umhlanga's beachfront premium market, Amanzimtoti's growing residential appeal, Pinetown's transport connectivity, and the revitalized city center's affordable options. Pretoria excels in central and eastern suburbs, with Hatfield particularly strong due to student accommodation demand, plus Menlyn and Garsfontein for professional tenants.

Port Elizabeth delivers consistent returns in the Central area, Summerstrand for student accommodation near universities, and Walmer for established residential demand.

How do short-term rental yields compare to long-term rental yields?

Short-term rentals through platforms like Airbnb can deliver significantly higher yields than traditional long-term rentals, but require more intensive management and carry additional risks.

In Cape Town and Durban's Umhlanga area, short-term rentals can achieve yields of 11-15% annually, substantially higher than long-term rentals in the same areas. This premium reflects tourist demand, business traveler needs, and the flexibility to adjust rates seasonally.

However, short-term rentals involve higher management costs, seasonal vacancy periods, more frequent cleaning and maintenance, and greater regulatory compliance requirements. Long-term rentals provide steadier income streams with less management intensity, though at lower yield rates.

The choice between short-term and long-term strategies depends on your management capacity, risk tolerance, and investment goals, with many investors finding success in hybrid approaches that adapt to seasonal demand patterns.

What are the current demand drivers for rentals in each city?

Rental demand across South African cities stems from distinct economic and demographic factors that create sustainable tenant pools.

1. Johannesburg & Pretoria: Corporate professionals, government workers, university students, and domestic migrants seeking economic opportunities drive consistent rental demand
2. Cape Town: International tourists, expatriate professionals, "semigration" from other provinces, and lifestyle seekers create diverse rental market segments
3. Durban: University students, coastal lifestyle seekers, retirees, and holiday accommodation guests support both long-term and seasonal rental demand
4. Port Elizabeth: University students from Nelson Mandela University, automotive industry workers, and coastal retirees provide stable rental market foundation
5. All Cities: Young professionals unable to secure mortgage financing, temporary workers, and growing preference for rental flexibility among millennials

What risks should investors be aware of in these cities?

South African property investment carries specific risks that vary by city and require careful consideration in your investment strategy.

Crime rates present the most significant concern, with Johannesburg and Durban experiencing higher crime levels that can affect property values and tenant retention. Investors must budget for enhanced security measures including access control, security systems, and potentially security guard services in higher-risk areas.

Economic stability risks include slow national GDP growth, currency volatility affecting international investors, and municipal financial challenges that can impact service delivery and infrastructure maintenance. Load shedding and infrastructure reliability particularly affect property values and rental demand.

Oversupply risks are emerging in Johannesburg's CBD and Durban's central precincts, where new developments may depress rental rates and yields. Property management reliability varies significantly between operators, making due diligence essential for protecting your investment returns.

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

Which factors affect the calculation of net rental yields?

Net rental yield calculations must account for all ownership costs to provide realistic investment return expectations.

Gross rental yield only considers rental income versus purchase price, while net yield deducts annual expenses including municipal rates (0.25-2% of property value), building insurance (0.2-0.5%), maintenance costs (0.5-1.5%), management fees (8-12% of rental income), and sectional title levies for apartments.

Additional deductions include vacancy allowances (typically 5-10% of potential rental income), legal and compliance costs, and periodic capital improvements required to maintain rental standards. Income tax on rental profits and capital gains tax on eventual sale also affect overall investment returns.

Investors should expect net yields to be 2-4 percentage points lower than gross yields after accounting for all expenses, making properties with 12%+ gross yields particularly attractive for maintaining double-digit net returns.

How do rental yields in South Africa compare to neighboring countries?

South Africa consistently delivers superior rental yields compared to most neighboring African countries and many international markets.

While countries like Botswana and Namibia offer yields of 6-8%, South Africa's 10-16% range significantly outperforms these markets. Zimbabwe's economic instability makes reliable yield calculations difficult, while Mozambique's emerging market offers potential but lacks market maturity and legal frameworks.

Compared to developed markets, South Africa's yields substantially exceed countries like Australia (3-5%), the UK (4-6%), or the United States (6-8%), making it particularly attractive for international investors seeking high-yield opportunities. The stable legal system, established property rights, and sophisticated banking sector provide additional security compared to frontier African markets.

Currency considerations do affect international investors, but the combination of high yields, potential rand appreciation, and relatively low entry costs often compensate for exchange rate risks over medium to long-term investment horizons.

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

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. Global Property Guide - South Africa Rental Yields
2. The African Vestor - Average Rental Yield Pretoria
3. Numbeo - South Africa Property Investment
4. WiseMove - Cost of Living Cape Town
5. Expatica - Cost of Living South Africa
6. The African Vestor - Average Property Price Durban
7. The Citizen - Top Buy-to-Let Suburbs
8. Steer - Cape Town Rental Market 2025