More South Africans are renting their homes into older age, according to the latest PayProp Rental Index.
6.8% of rental applicants in Q4 2024 were aged 60 or over, compared to 6.1% a year earlier. While they are still the smallest group of tenants, older people are also the fastest-growing group.
On average, South Africans are making their first property purchases later in life, as rising property prices and elevated interest rates have made buying less affordable. Mortgage broker BetterBond says the average age of a first-time homebuyer is now 37, up from 33 a few years ago – and raises the possibility that even more people will continue to rent for life.
BetterBond notes that bond application volumes are up, but for now, the underlying economic factors are staying the same. The Reserve Bank’s Monetary Policy Committee voted to keep the prime rate at 11% at its March meeting, with Governor Lesetja Kganyago pointing to global economic uncertainty as a key factor in their decision. Even in the medium term, they forecast that interest rates will stabilise at just 25 basis points below the current level.
But even as buying becomes more affordable, renting into retirement has its advantages, according to some property experts. Richard Gray, CEO of Harcourts South Africa, says it gives retirees the flexibility to relocate or downsize as needed. In such cases, having a landlord or agent to manage property maintenance will give older tenants peace of mind.
Adapting to an ageing tenant population
The rising number of older tenants may be good news for landlords and agents. On average, according to the PayProp Rental Index, over-60s have lower risk and healthier spending habits than any other age group. 2 in every 3 older renters are considered minimum risk by the PayProp Tenant Assessment Report, which tracks tenants’ rental payment history as well as their credit scores. Across all age groups, 40.8% of applicants are in the lowest risk category.
However, it may be worth thinking about how to appeal to this group. Factors like accessibility could become more important as the population of older tenants continues to grow.
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