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Aug 12, 2015

South Africa's rental yields are good


Last Updated: Aug. 12, 2015
Cape Town - Apartments COST (US$) YIELD (p.a.) PRICE/SQ.M. (US$)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
60 sq. m. 150,120 1,035 8.27% 2,502 17.25
90 sq. m. 282,150 1,346 5.72% 3,135 14.95
120 sq. m. 393,240 1,776 5.42% 3,277 14.80
300 sq. m. 1,117,800 4,635 4.98% 3,726 15.45
Cape Town - Houses
300 sq. m. 865,800 3,564 4.94% 2,886 11.88
Johannesburg - Apartments
120 sq. m. 180,960 1,404 9.31% 1,508 11.70
200 sq. m. 332,400 1,814 6.55% 1,662 9.07
Johannesburg - House
400 sq. m. 531,600 n.a. n.a. 1,329 n.a.
1000 sq. m. 1,507,000 n.a. n.a. 1,507 n.a.
Districts researched
Cape Town: Atlantic Seaboard (Bakoven, Bantry Bay, Camps Bay, Clifton, Fresnaye, Green Point, Mouille Point,), Hout Bay, Waterfront, City Bowl
Johannesburg: Northern Suburbs ( Dunkeld, Hyde Park, Houghton Estate, Illovo, Inanda, Melrose, Parkhurst, Parktown, Parkview, Sandhurst, Saxonwold and Westcliff
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule

South Africa offers good rental yields in its large cities, especially on smaller apartments.

Gross rental yields for Johannesburg apartments, i.e., the gross rental return on a property if fully rented out, are good, ranging from 6.5% to 9.3%.

Gross rental yields on apartments in Cape Town range from 5% to 8.3%.

So Johannesburg yields are higher, for the sizes that we have looked at. In previous years rental yields in Johannesburg were significantly higher. This difference is not so obvious this year.

In Cape Town is the most popular tourist destination in Africa. Its amazing beaches and weather are ideal for retirees and foreign property buyers. Atlantic Seaboard properties are among the most sought-after because of the beaches and cliffs upscale neighbourhoods like Bakoven, Bantry Bay, Camps, Clifton, Fresnaye, Green Point and Mouille Point. Some houses nestled on cliffs have sweeping views of the Atlantic Ocean. City Bowl, which includes the central business district of Cape Town, is another upscale residential suburb. It is one of the most stable residential markets in Cape Town, because of its prime central location and vibrant cosmopolitan lifestyle.

Renting a Cape Town apartment will cost from around USD 15 to USD 17 per sq. m. per month, i.e., a 120 sq. m. apartment costs around USD 1,700 per month, and a 300 sq. m. apartment costs around USD 4,650 per month.

The most desirable neighborhoods in Johannesburg are in the north of the city, including suburbs like Dunkeld, Hyde Park, Houghton, Illovo, Inanda, Melrose, Parkhurst, Parktown, Parkview, Sandhurst, Saxonwold and Westcliff. Nelson Mandela has a house in Houghton.






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