KwaZulu-Natal’s coastal residential belt is emerging as an attractive market for rental investors, with strong demand, limited supply, competitive yields and relatively affordable property prices supporting the sector.
The KwaZulu-Natal (KZN) coastal residential belt is increasingly drawing rental investors as demand continues to outpace supply in several prime areas.
According to the Seeff Property Group, the rental market is being supported by sustained demand, while economic pressures, including the recent interest rate hike, have prompted some prospective buyers to continue renting.
Demand is also driven by people moving between areas and those relocating to metros in search of economic opportunities. Properties close to schools, business nodes and lifestyle amenities tend to attract strong rental demand.
KZN is the most affordable of South Africa’s three major economic provinces, with an average rent of R9,293. Gross rental yields range from 6.5% to 9.5%, depending on the area, while rental growth averages between 3% and 4.5% year-on-year.
South Coast and Amanzimtoti
The South Coast has attracted remote workers and young families relocating from Gauteng and Cape Town.
Tracey Cronje, manager for Seeff Hibiscus, said the cost of living was about 40% lower than on the North Coast, while lower entry-level property prices offered some of the highest gross rental yields.
Sectional title properties start at about R900,000 to R1.5 million and can generate rentals of between R8,500 and R12,000 a month, with annual increases of 5% to 7%.
Amanzimtoti’s proximity to the Durban Metro makes it popular among middle-income tenants and employees on corporate contracts.
Seeff Amanzimtoti rentals administrator Ash Narsingh said demand was particularly strong for pet-friendly townhouses and freestanding homes renting for between R7,000 and R10,000 a month.
While holiday complexes continue to attract seasonal investors, the long-term rental market remains consistent, supported by corporate relocations and monthly returns of about R8,000 to R10,000.
Durban suburbs and Upper Highway
Affordable areas such as Queensburgh are also experiencing strong rental demand, with limited supply.
Michelle Vermeulen, licensee for Seeff Queensburgh, said the branch was frequently inundated with rental applications.
Sectional title properties priced from R600,000 to R750,000 are in particularly strong demand and achieve rentals of between R6,500 and R11,500 a month.
The Upper Highway areas of Kloof, Hillcrest and Waterfall continue to attract families and remote workers seeking larger homes and a country-style lifestyle.
Seeff Upper Highway owner and director Gregg Wilson said demand was supported by access to schools and secure estate living.
Townhouses and pet-friendly family homes remain the strongest investment categories, according to Wendy Thomson, head of rentals for Seeff Upper Highway.
Properties priced between R1 million and R3 million achieve rentals of R8,000 to R20,000 a month, with gross yields of 6% to 9% and annual escalations of 5% to 8%.
North Coast corridor
The KZN North Coast corridor remains the province’s fastest-growing residential belt.
In Richards Bay, corporate relocations and industrial expansion continue to support the rental market, according to Elaine Vandayar, licensee for Seeff Richards Bay.
The area is experiencing a shortage of affordable rental stock in the R8,000 to R12,000 range, with demand for two- and three-bedroom units continuing to outstrip supply.
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