As noted in the Terms of Reference for this study, data reflecting supply and demand conditions and trends in the rental housing sector is critical – both in enabling policymakers to create appropriate and effective policy and in encouraging private sector participation, particularly in segments of the market that are perceived to carry high risks. This report contains a summary of available data relating to the sector, drawing out implications where possible for policy and highlighting key data gaps. It is hoped that this report provides an accessible resource that is useful for both policymakers and actual or potential investors in the sector, particularly in the lower income or affordable rental markets.

Data from various sources indicates that the rental sector is significant, accounting for roughly 20% of households in South Africa. The majority households that pay rent are poor or low-income. Roughly 55% have an income of less than R3,500 per month while a further 22% earn between R3,500 and R7,500. Data on dwelling conditions, which indicates that over 40% of renter households live in what could be characterized as slum conditions, points to significant need for affordable1, better quality accommodation. In addition, anecdotal evidence suggests significant unmet demand for affordable accommodation in key urban centres. Both private landlords and social housing institutions report exceptionally low vacancy rates. New social housing projects released onto the market in centres such as Johannesburg, Durban, Port Elizabeth and East London are typically over-subscribed often by a factor of ten or more. Private landlords offering more affordable accommodation in inner city Johannesburg do not have to look for tenants. To quote one landlord; “tenants find you”. Demand in that market is characterized by property owners as “insatiable”, “a bottomless pit” and rentals have increased significantly over the past few years.