Just how expensive it has become to rent a roof over your head in Cape Town is nowhere more evident than in the CBD, where tenants are now forking out an average R15,260 a month for a tiny bachelor pad. Five years ago, the same unit would have gone for R8,436 a month — an 80% jump.
If you’re looking for more square meterage, you’re now paying double what you would have in 2020. Average rentals for a one-bedroom apartment have surged from R10,880 to R19,225, while two-bedroom units will set you back nearly R33,500 today, up from R15,547 five years ago.
That’s evident from the latest State of Cape Town Central City Report 2025 — A Year in Review, released earlier this month by the Cape Town Central Improvement District (CCID), and the FM’s comparison to the 2020 report. The CCID’s rental data is based on apartments available to let in the central city on Property24.com.
While the rental data for Cape Town’s CBD may be slightly distorted by the inclusion of pricey penthouses — one two-bedroom unit of 315m² was listed earlier this year at an eye-watering R75,000 — it underscores the strength of Cape Town’s post-pandemic housing rebound.
Rental growth in the CBD over the past five years comes on the back of the equally sharp uptick in apartment prices. According to the CCID report, the median price of sectional-title properties in the central city has increased by a hefty 53.5% in the five years to December 2025 — from R1.27m to R1.95m.
It has to be said that 2020’s valuations and rentals came off a relatively low pandemic-induced base. Still, the city’s housing cost gap vs that of other metros continues to grow — a lead that Grant Elliott, deputy chair of the CCID and COO of Thibault Investments, says was supported last year by the entry of more international buyers cashing in on the cheap rand exchange rate.
Cape Town’s impressive rally in both apartment prices and rentals comes amid the ongoing return of developers and property investors to the CBD. Elliott says 22 new developments bringing 3,260 residential units were added to the central city in the past five years, taking the area’s apartment pool to 7,675 (including units in mixed-use buildings and aparthotels).
Major projects that have already reshaped Cape Town’s skyline include One Thibault (428 units), 16 on Bree (381 units), The Rockefeller at Harbour Place (395 units) and Charlie & the Chairman (328 units).
And there’s more to come. Elliott says the growing stature of the CBD as a prime residential node is underscored by the fact that 16 (55%) of the 29 buildings that make up the CBD’s R12.76bn property investment pipeline (under way, proposed or recently completed) are residential buildings.
“These projects come in all shapes and sizes, from small heritage renovations to bold and ambitious developments that will dramatically alter the CBD’s character and composition,” he says.
Notable new projects include the R1.2bn conversion of the Golden Acre office tower and shopping centre in Adderley Street into a 24-storey apartment block, ElevenonB on Buiten Street, which is adopting a heritage-meets-modern-design approach, and One on Bree, another skyscraper that will bring a 500-room luxury hotel and more than 279 residences to the central city. There’s also City Park, the R1.3bn redevelopment of the former Christiaan Barnard Hospital in Bree Street, which will house the first Mama Shelter Hotel and branded residences in Africa.
Best buy-to-let options
Notwithstanding Cape Town’s ever-higher property prices and rentals, industry data shows that the Mother City is not necessarily the most lucrative place for buy-to-let investors to be.
Latest rental data from Stats SA point to an encouraging uptick in rentals across the country in the past few quarters. Average national rental growth has accelerated to 4.6% in the second quarter, up from 3.8% a year earlier (see graph).
Importantly, there’s been a marked improvement in the fortunes of Joburg’s rental housing market in the past 12 months. In fact, Joburg — and not Cape Town — is the place to be if you’re looking for the highest income returns.
The latest quarterly Rode Report, which tracks residential performance metrics such as flat vacancies and market rentals, shows that rental demand has picked up notably in Gauteng in the past year, pushing the flat vacancy rate in the province down from 5.5% to 3.8% in the second quarter year on year. Joburg is now at 3.9%, from 4.59%, while Tshwane has also declined, from 4% to 3.6% over the same 12-month period.
Granted, Gauteng’s vacancy rate is still above the Western Cape’s average 2.2% – Cape Town is now at 2.3%, Stellenbosch at 1.2% and George at 1.5% – but it nevertheless suggests the province is finally starting to play catch-up with the Western Cape.
Rode’s vacancy rates incorporate 65,000 units from members of the South African Multifamily Residential Rental Association (SAMRRA), an industry body that represents institutional and JSE-listed landlords.
Lower vacancies equal less choice for tenants, which typically translates into higher rentals, which is also evident from the Rode Report. Though the Western Cape is the only province where rental growth outpaced inflation, with an average increase of 7.6% in June, up from 5.4% a year earlier, rental growth in Gauteng almost doubled in the past year from 1.5% to 2.7%.
In the second quarter of 2025, Gauteng was still the worst performer in terms of rental growth among the nine provinces. And while it still lags the Western Cape, Mpumalanga and KZN, the province has moved up three places in the rankings and is now ahead of Limpopo, North West and the Northern Cape.
The Rode Report confirms how much more an apartment costs to rent in Cape Town than in similar suburbs of Joburg, Tshwane and Durban: mid- to high-priced upmarket two-bedroom units in Sea Point/Green Point fetch R26,700, vs R17,988 in Sandton, R15,000 in the greater Umhlanga region on Durban’s north coast, and R12,950 in Tshwane’s eastern suburbs of Menlo Park, Lynnwood and Faerie Glen.
Happy returns
However, landlords are earning higher returns in Joburg than in the Mother City (based on second quarter data). Latest rental yields — or capitalisation rates — achieved in apartment blocks owned or managed by SAMRRA members average 8.1% in Joburg vs 7.3% in Cape Town (A-grade properties).
Capitalisation rates refer to the expected net operating income in year one divided by the purchase price.
In Joburg’s leafy Bryanston, for example, buy-to-let landlords are fetching a net yield of 8.4% (after running costs are deducted), well ahead of the rather meagre 5.3% that Cape Town landlords are getting on the fashionable Atlantic seaboard. Joburg’s higher income returns come primarily on the back of lower property prices.
Jonathan Kohler, CEO of Landsdowne Properties, one of the country’s largest residential rental management firms, confirms that Joburg leads the pack in terms of rental yields. He says based on current resale values and achieved rentals for apartments of similar size and specification in Landsdowne’s housing portfolio, Joburg is achieving an average 12.6%, followed by Cape Town at 10.3% and KZN at 8.6%. To get to net yields, landlords typically deduct 2%–2.5% for running costs and other expenses.
Kohler tells the FM that there’s been a structural shift in Joburg’s rental market in the past 12 to 18 months, with a notable increase in rental demand. It’s a trend he ascribes to a rise in reverse semigration. “As property prices and the broader cost of living have increased in Cape Town, more buyers and tenants are returning to Joburg.”
Kohler adds that it’s the first time in many years that the excess rental stock under which the Joburg rental market has been labouring for almost a decade is being mopped up “meaningfully”.
He concedes that political instability and concern about poor municipal service delivery and crumbling infrastructure continue to weigh on Joburg property investor sentiment. Still, he says lower vacancies amid stronger demand mean the outlook for Joburg’s rental market now looks decidedly more rosy than it did a year or two ago.
