South Africa

Johannesburg is the financial and economic centre of South Africa. Gross rental yields, i.e., the gross rental return on a property if fully rented out, on Johannesburg apartments are spectacular, ranging from 10.69% to 13.31%. Three and four- bedroom houses in Johannesburg earn moderate to good rental yields of 5.33% to 7.24%.

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.

A two-bedroom apartment in the northern suburbs of Johannesburg will cost around USD 170,000, while a three-bedroom apartment costs around USD 280,000. Renting an apartment in Johannesburg, on average, costs somewhere between USD 900 to USD 2,500 per month.

Surprisingly, it is more costly to rent a house in Johannesburg than in Cape Town. A three-bedroom house in Johannesburg costs around USD 3,500 per month whereas in Cape Town, it costs only USD 3,000 per month.

In Cape Town the situation is completely different as regards return on investment. True, 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.

But apartments and houses in Cape Town return poor rental yields, ranging from 3.27% to 4.97%. A 120 sq. m. apartment located in any of these neighborhoods will cost around USD 480,000 to buy. A bigger apartment, say of 220 sq. m., will cost more than a million US dollars.

Renting a Cape Town apartment will cost from around USD 14 to USD 17 per sq. m. per month, i.e., a 120 sq. m. apartment costs around USD 1,900 per month, and a 220 sq. m. apartment costs around USD 3,000 per month.

Houses such classy neighborhoods also cost more than a million dollars. For example, a four-bedroom house costs on average USD 1,500,000. Bigger houses with six or more bedrooms cost more, around USD 1,700,000. Houses are quoted by the number of bedrooms, regardless of size (that’s why we don’t have the sq. m. prices of houses).

Renting a house will cost you around USD 3,000 to USD 4,500 per month.

So the moral is simple – own a property in Johannesburg. But if you visit Cape Town, you should rent.