Gauteng rental yields outpace Cape Town as lower prices lift investor returns
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A new Codera Analytics review of prices and rents in Gauteng and the Western Cape shows higher gross rental yields in Gauteng, where cheaper entry prices give investors more income per rand spent.
Property investors in Gauteng are generally achieving higher rental yields than their counterparts in the Western Cape, largely because properties in the province are cheaper while rental income remains relatively strong. That is according to a new analysis by Codera Analytics, which examined property prices and rents across suburbs in Gauteng and the Western Cape.
Codera said its analysis focused on gross rental yields, which measure annual rental income against a property's assumed value before costs and taxes are taken into account. For houses, a larger proportion of properties available in Gauteng imply rental yields of around 8% or more than in Cape Town, the analytics firm said. It added that Gauteng rental yields also tend to be higher on average for apartments, since properties there are cheaper on average. The analysis found that yields were particularly attractive in lower-priced Gauteng suburbs, where rents can represent a larger proportion of property values than in the Western Cape.
The gap highlights the trade-off facing investors: while the Western Cape has enjoyed strong property-price growth and rental demand, higher purchase prices can reduce the income return generated from a property. Data from Property Professional similarly showed that Gauteng's sectional-title gross rental yield remained above 12% at the end of 2025, compared with less than 10% in the Western Cape. Full-title properties in Gauteng recorded a gross yield of 7.1%, against 7.8% in the Western Cape, while figures from the Global Property Guide put the average gross rental yield for Johannesburg apartments at 13.47%, compared with 9.49% in Cape Town.
The Western Cape nevertheless remains stronger on rental growth. According to Seeff Property Group, the province had the country's highest average rent at about R11,894 a month, compared with R8,900 in Gauteng, and Western Cape rents were growing by 6.8% year on year against 3.2% in Gauteng.
Codera cautioned that its figures represent gross rental yields and do not account for costs such as maintenance, rates, taxes, vacancies, insurance or property-management fees, so the actual return to an investor would be lower than the headline gross yield. The figures underline the importance of purchase price when assessing rental investments: a higher monthly rent does not necessarily translate into a better investment return if the purchase price is substantially higher.