South African tenants face another year of rising costs, landlords warn

South Africa's institutional residential landlords say tenants face another year of rising costs, warning that the Medium-Term Budget Policy Statement delivered by Finance Minister Enoch Godongwana last week offers little immediate relief for renters.

Palesa Mkhize, chief executive of the South African Multifamily Residential Rental Association, said jobs are scarce and electricity keeps rising at about twice the rate of inflation. "Growth of 1.2% won't create the jobs our tenants need," she said, adding that while Treasury's efforts to stabilise government debt could eventually bring borrowing costs down, that relief would take time.

SAMRRA represents the institutionally owned and professionally managed multifamily residential rental sector. Its members include institutional landlords managing more than 75,000 residential units across roughly 550 properties valued at more than R72 billion.

Mkhize said landlords themselves are absorbing rising finance, rates and water costs, along with the expense of providing backup services when municipal infrastructure fails. She said members would keep rent increases close to inflation and prioritise retaining good tenants over pushing rents higher, while continuing to invest in water and power resilience rather than waiting for municipalities to fix their networks.

She added that Treasury's acknowledgement that municipal tariffs are too low to cover the cost of services was a key issue for the sector, warning that if tariffs rise before services improve, landlords end up paying three times: the municipal bill, generators, tanks and pumps, and then higher tariffs. Chris Rencken, managing director of Prizm Property Partners, said the cut in the fuel levy - R1.50 a litre for petrol and R3 a litre for diesel from 4 November, tapering until early January - would be the most immediately noticeable measure for households and businesses, though the relief is temporary.