South Africans return to buy-to-let as investors hit record share of home loans
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Investment buyers accounted for a record 14% of South African home loan applications earlier this year, with more than 30% of Western Cape applications tied to buy-to-let purchases, according to lending data.
South Africans are returning to buy-to-let property investment in growing numbers, with investment buyers accounting for a record 14% of home loan applications earlier this year as stronger rental demand and lower vacancies improve the case for becoming a landlord.
The Western Cape is leading the resurgence. More than 30% of home loan applications in the province have been linked to investment properties, based on figures cited from ooba Home Loans, with separate Standard Bank data putting the proportion at 31%. ooba previously recorded buy-to-let applications at an all-time national high of 10.9% in June 2023.
Conditions have become more attractive for landlords. National apartment vacancies fell from 4.4% in the first quarter of 2026 to 3.9% in the second quarter, while rental growth reached about 4.6% in June. Western Cape rental growth reached 7.6% year on year in June 2026, compared with about 2.7% in Gauteng and 3.5% in KwaZulu-Natal.
Financing has also eased. ooba reported an overall home loan approval rate of 84% in the first quarter of 2026, with average deposits falling to 12.8% of purchase prices from 15.4% a year earlier.
But Renier Kriek, managing director of alternative housing financier Sentinel Homes, warned that inexperienced buyers risk confusing ownership of property with owning a profitable investment. He said rates, taxes, levies, insurance, maintenance, vacancies, management costs and tax can materially alter returns, and recommended budgeting for maintenance equivalent to 5% to 10% of rental income. PayProp reported average national rent of R9,286 in the third quarter of 2025 with annual rental growth of 4.9%, but 17.2% of tenants were in arrears.