Impact of Covid-19 pandemic reflected in latest Payprop Rental Index

The PayProp Rental Index for the second quarter of 2020 reflects the first clear indication of the effects of lockdown on rent levels, rental growth and arrears in South Africa. The data shows sub-inflationary rental growth rates for April, May and June at 2.3%, 1.1% and 1.6% respectively (year on year). This is despite inflation dipping to its lowest level in years.


According to PayProp head of data and analytics Johette Smuts, affordability has been an important driving force behind the dramatic slowdown due to loss of income from pandemic-related redundancies. “Many tenants have taken a reduction in their monthly income or lost their source of income completely, forcing them to reassess their rental situation or to downscale,” says Smuts.

Another key factor negatively influencing long-term rental growth is the return of properties that were previously let to the tourism market via short-term letting platforms like Airbnb. “With the travel restrictions, owners have been flooding the long-term rental market with these properties, thereby suppressing prices,” she says.

Post Covid-19: How the property market will potentially evolve

In a recent webinar on ‘Exploring post-Covid-19 property trends in South Africa’, Associate Professor Francois Viruly, University of Cape Town’s (UCT) head of the Urban Real Estate Research Unit, looked at the longer-term trends in the country’s property market…

27 Aug 2020

Provincial results

Provincially, the year-on-year rental growth rate declined from Q1 to Q2 in all but two provinces. In the North West, rental growth measured 3.9% in Q2, compared to 3.8% in Q1, and in the Northern Cape, growth of 3.7% was measured in Q2 vs 3.6% in Q1.