New property investment trends are emerging in South Africa as investors tap into the growing demand for coastal homes and look beyond traditional rental models to build wealth.
Source: Supplied. Chiko Manokore, Head: Personal and Private Banking at Standard Bank.
Data from Standard Bank reveals that one in eight mortgage applications nationally over the past year were for buy-to-let properties.
The Western Cape emerged as a leading hotspot for property investors, with 31% of new home-loan applications in the province linked to buy-to-let ventures – more than double the national average of 12%.
“Over the past decade, the Western Cape has consistently positioned itself as an investment destination. Areas like Cape Town have benefitted from consistent demand driven by tourism and a growing expat community,” says Chiko Manokore, head of Personal and Private Banking at Standard Bank.
Interest in bed and breakfasts (B&Bs) and stand-alone homes within estates has surged, particularly over the past five years. The province also ranks second – after Gauteng – in terms of building loans issued by Standard Bank, with a significant portion taken up by buy-to-let investors.
“You are seeing more uptake for large estates, lots of bread and breakfasts and interestingly a growing number of people building multiple properties in a single stand,” adds Manokore.
Gauteng rental growth
Gauteng, South Africa’s economic hub, continues to show strong buy-to-let activity too, nearly double the national average. Tshwane is leading in this regard and the province’s rental market is driven largely by investors seeking additional income streams.
“In Johannesburg, property investment tends to focus more on rental income, unlike the Western Cape, where short-term rentals are particularly popular,” explains Manokore.
The Eastern Cape has also become a key player in the buy-to-let market, attracting more property investment than the national average. In contrast, KwaZulu-Natal (KZN) has seen lower buy-to-let activity in the past year. With only 6% of home-loan applications in the province linked to property investment.
“KwaZulu-Natal unfortunately has lost some speed, especially in the last few years, because of the many challenges it has faced. Environmental setbacks such as floods and the 2021 riots have impacted investor confidence,” Manokore adds.
Overall, this year’s data highlights the evolving nature of South Africa’s investment property market, with notable shifts in provincial preferences that could reshape the landscape for investors.
