South Africa's Rental Market: 2026 Credit Trends Report

With rising interest rates keeping many South Africans out of the property purchase market, the rental sector is seeing unprecedented demand — and increased risk. Recent data from TPN Credit Bureau, the South African Reserve Bank, and Statistics South Africa paint a detailed picture of the challenges facing landlords and tenants alike in 2026.

Key Finding 1: Demand Is Up, But So Is Risk

Rental demand in major metropolitan areas — Johannesburg, Cape Town, Durban, and Pretoria — has increased by an estimated 15-20% year-on-year according to TPN's Rental Monitor for Q1 2026. However, the proportion of applicants with adverse credit findings has also risen by approximately 8% compared to the same period in 2025. Cape Town's Western Seaboard and Johannesburg's Sandton/Midrand corridor are seeing the highest demand, while the Eastern Cape and Free State are experiencing more moderate growth.

The South African Reserve Bank's repo rate, which stood at 8.25% as of early 2026, continues to make home ownership unaffordable for many middle-income earners. The prime lending rate of 11.75% means bond repayments on a R1.5 million property exceed R17,000 per month — well beyond the reach of households earning below R40,000 monthly.

Key Finding 2: Fraudulent Applications Are More Common

Somor CredIntel's internal data shows a 30% increase in flagged fraudulent documents compared to 2025. The most common fraud types are falsified payslips (47% of cases), fabricated employment references (28%), and identity theft (25%). Landlords who rely solely on document review without professional verification are at significant risk. The Financial Sector Conduct Authority (FSCA) has also flagged an increase in the use of AI-generated documents, which are virtually indistinguishable from genuine documents to the untrained eye.

Key Finding 3: Affordability Remains the Core Issue

According to the South African Reserve Bank's 2025 Quarterly Bulletin, the average South African household spends approximately 62% of disposable income on debt servicing. This means many applicants are technically over-committed before they even apply for a rental. The NCA's affordability assessment criteria, updated in 2015 under Regulations 55A, require credit providers to deduct minimum living expenses from gross income before assessing whether a consumer can afford additional credit obligations.

TPN's data indicates that the national average rental escalation was 5.2% in 2025, outpacing salary increases of approximately 4.1% in the formal sector. This gap is squeezing tenants and increasing the risk of default, particularly in the R5,000-R12,000 monthly rental bracket where the majority of South African renters fall.

Key Finding 4: The Impact of POPIA on Tenant Screening

The Protection of Personal Information Act 4 of 2013 (POPIA), which came into full effect on 1 July 2021, has significantly changed how landlords and screening providers handle tenant data. Under POPIA, landlords must obtain the tenant's explicit, written consent before accessing their credit profile. Failure to obtain proper consent can result in complaints to the Information Regulator and potential fines of up to R10 million.

Section 11 of POPIA requires that personal information may only be processed with the data subject's consent, and Section 8 limits processing to the specific purpose for which consent was given. This means a consent form for a credit check cannot be used for other purposes, such as marketing. Somor CredIntel manages the entire consent process on behalf of landlords, ensuring full compliance with POPIA.

What This Means for Landlords in 2026

Landlords must adapt to the new reality: higher demand does not mean lower risk. In fact, the opposite is true. Real-time credit monitoring and strict affordability assessments are the only reliable way to separate good tenants from bad ones. With the legal landscape evolving through POPIA, the NCA, and the Rental Housing Act, compliance is no longer optional — it's essential.