A recent report has found that low-income South Africans are under financial pressure, with tenants struggling to pay their monthly rent, especially those paying rent below R3 000. The 2025 third-quarter TPN Residential Rental Monitor showed that rent arrears are a worrying trend for landlords. The report tracks how the residential rental sector is performing and whether tenants are keeping up with their rental obligations.
Waldo Marcus, Director of Corporate Marketing, MRI Software, says TPN Credit Bureau provides an overview of the residential rental market in the country. Its escalation data, for example, relies on actual rental figures rather than data provided by a sample of agents to determine the rental inflation rate. TPN data spans a diverse range of investor types and portfolio sizes, representing the broadest dataset available within the rental sector.
The reportnoted that landlords and agents continue to maintain a bullish approach to rental escalations in the third quarter, increasing investments into a sector that is showing positive returns. However, it appears that cracks in consumer household budgets are appearing. “The Consumer Price Index (CPI) has been showing an upward trend since May 2025, which does not bode well for consumers who are highly indebted and have limited room for income growth in the immediate future,” reads the report.
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TPN’s data reveals that the national average rental increased from R9 308.68 in the second quarter of 2025 to R9446.43 in the third quarter. National rental escalations increased from 4.62% in the second quarter of 2025 to 4.76% in the third quarter, across both sectional and full title rental units. The report noted that lower rental values have increased more aggressively since the start of 2024.
Rentals of less than R1 500 per month increased from 6.33% in the second quarter to 7.86% in the third quarter of 2025. Rental units priced between R1 500 and R3 000 are following the same accelerated growth trend, but at a slower pace, increasing from 4.33% in the second quarter to 4.49% in the third quarter of 2025, below the national average. At the higher end of the affordable rental category, units priced between R3 000 and R4 500 a month experienced below the national average rental growth, increasing from 3.72% in the second quarter to 3.81% in the third quarter. “The affordable rental market (less than R4 500) makes up 26.7% of the total formal rental market,” reads the report.
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