Residential tenants defy the odds as good standing rises to 83%
Tenants across South Africa continue to show remarkable financial resilience despite mounting economic pressure. By the end of Q1 2025, 83.32% of tenants were in good standing, a modest but important improvement over Q4 2024.
While unemployment rose to 32.9%, with 75.7% of those classified as long-term unemployed, tenants have strengthened their payment behaviour, particularly in middle and higher-income rental bands. This resilience stands in contrast to the broader economic environment, highlighting tenants’ current commitment to housing stability.
With that, the rental market distribution continues to shift upwards. In 2013, over 60% of tenants were in the R3,000 to R7,000 band. That number has dropped to 44.5% as escalating rental prices push more tenants into higher-value brackets. The R7,000 to R12,000 category now represents over 30% of tenants, triple what it was a decade ago. Luxury rentals (above R25,000) have also increased threefold and now account for 1.7% of the market.
This shift illustrates stronger national rental growth, which stood at 4.49% in Q1 2025. The higher-rental value bands are driving this figure, with escalations of between 5.12% to 5.68% in the R7,000 and above categories. In contrast, escalations in lower-value segments have been subdued, reflecting vacancy pressure and affordability constraints.
Provincially, the Western Cape continues to lead with 89.1% of tenants in good standing – despite having the highest rental escalations in the country. KwaZulu-Natal remains the weakest province, with only 76.9% of the formal rental population in good standing and the highest rate of non-payment. Gauteng, which houses 63% of South Africa’s formal rental market, is experiencing mixed trends: tenant good standing declined slightly in Q1, while rental escalations rose from 3.03% to 3.58%.
These results highlight the critical balance landlords must strike, maintaining rental income while preserving occupancy through strict screening, proactive collection strategies, and market-sensitive escalations.
Download the full TPN Residential Rental Monitor Q1 2025 for a breakdown of good standing trends, rental escalations, and provincial performance.