Investors Flock to Coastal Buy-to-Let Properties as Rental Demand Booms in South Africa

As the South African economy enters a more stable period, investors are turning their attention to the country’s coastal buy-to-let market—particularly in fast-growing hubs like the KwaZulu-Natal (KZN) South Coast. With rental demand rising and infrastructure development accelerating, 2025 is shaping up to be a pivotal year for property investment.

Market Momentum Returns After Uncertainty

According to Barto van der Merwe, Managing Director of Renishaw Property Developments, the market conditions have significantly improved, setting the stage for confident investment.

“Following years of economic uncertainty, the shifting market conditions now favour investors ready to take advantage of improved stability in South Africa,” van der Merwe said.

This optimism is translating into a marked increase in demand for quality coastal rentals, especially within secure retirement and lifestyle estates like Renishaw Hills, a flagship development on the KZN South Coast.

Three Reasons Why Now Is the Right Time to Invest

Van der Merwe outlined three compelling factors driving investor interest in 2025:

1. Improved Political and Economic Climate

With the national elections concluded, political uncertainty has decreased, boosting investor confidence. The prime lending rate stands at 11.0%, underpinned by a 7.5% repo rate set by the South African Reserve Bank. Expectations of rate cuts could create better financing opportunities and long-term returns for buyers.

2. Infrastructure Development Fuels Value Growth

The South African government’s decision to ease restrictions on public-private partnerships under R2 billion, effective from June, is set to unlock a new wave of infrastructure development. Projects include schools, retail centres, and leisure facilities, all of which will boost the value of nearby residential property.

Van der Merwe notes that these upgrades are already being planned for the broader Renishaw Coastal Precinct, where Renishaw Hills leads as the anchor development.

3. Demand Outpaces Supply in Coastal Areas

A growing number of South Africans are moving from inland cities to coastal regions, driven by semigration and more flexible work-from-home arrangements. But while the demand for secure, high-quality housing is rising, supply isn’t keeping up.

“This presents a prime opportunity for investors to secure buy-to-let properties before prices peak,” van der Merwe emphasized.

Rental prices in KwaZulu-Natal are already increasing and are expected to rise further as migration and infrastructure projects accelerate.

Rental Yields on the Rise

The South African coastal rental market—especially in scenic, secure estates—is entering a golden period. Between growing tenant demand, favourable financing prospects, and a wave of new infrastructure investment, 2025 presents one of the most strategic moments in recent memory to buy into the rental market.

{Source IOL}

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