SA rent vs buy: A shocking timeline is revealed when it comes to winnings

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SA rent vs buy: A shocking timeline is revealed when it comes to winnings

“Rent is dead money” – that saying may have been true some years ago but the reality is that it is cheaper to rent than to rent in almost every suburb and city in South Africa.

And it will be many years yet, a new report shows.

According to REA Group data, taking a 30-year loan with a 20 per cent deposit at an interest rate of 5.75 per cent and tax compounded using a 10-year monthly rate, lends a crossover month so that mortgages are cheaper than renting in all of metro Adelaide in February, 2033.

The interest rate is assumed to rise to 6.1 percent, and that period ends in September, 2033.

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At 5.75 per cent, monthly mortgage payments in greater Adelaide remain at $3968, compared to just $2600 in monthly rent.

Add that to an interest rate of 6.1 percent and that figure jumps to $4121 in mortgage payments compared to $2600 in rent.

Renters in South Africa’s chip areas will have a long time before it becomes cheaper to buy.

Actually a long time.

With the average monthly rent in St Peters at $11,204.60, while rents remain at $3349.67, renters will have until January 2059 before the market turns in favor of buyers.

That period extends to February 2060 when the interest rate rises to 6.1 percent.

Turner Real Estate CEO Emma Slape. Photo: Brad Griffin

The CEO of Turner Real Estate, Emma Slape, said that as house prices continue to rise, it is not surprising that the gap between rent and mortgage payments is widening.

“Combined with needing a deposit to make the first move, the time it takes to become a homeowner is getting longer and longer,” he said.

“Hiring is a really personal decision, often made for a variety of reasons, not just financial.

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“People may want to live in the school area, be close to family or be close to work.

“Finance is one part of the problems, but it is not the only reason.

“For many, renting is a good choice that suits their lifestyle or current needs.”

REA Group senior economist Anne Flaherty

REA Group chief economist Anne Flaherty said the pace at which rents are rising in Australia’s capital cities has slowed since last year, although they remain high in regional areas.

“Rents were at record levels across all markets in December and are expected to reach new records in 2026.

“While rent growth is expected to continue to moderate through 2026, vacancy rates remain low and population growth will fuel demand for additional rentals.”

Isabelle Robinson, 26 and Jacob Johnson-Firth, 30 are also looking for a place to rent. Photo: Eleni Tzanos

Isabelle Robinson, 26, and her partner Jacob Johnson-Firth, 30, are currently renting in Edwardstown and are looking for another place to rent as they are due to move out later this month.

“We rent because we don’t have the power to buy because with a large deposit that you have to put down and pay that amount and interest, you end up paying a lot more money than what was advertised,” he said.

“I don’t have a problem with renting at all – there are some downsides, but it can give you access to places you can’t buy.”