It is estimated that Soweto is home to about 40% of the total population of Johannesburg and currently millennials – those between 23 and 38 years old – are driving the rental market there, estate agents tell Fin24.
Khosi Sibiya, co-owner of Seeff's branch in Soweto, says millennials are currently the generational segment in Soweto who rent the most.
"Millennials are moving out of their parents' homes and forming their own independent households. Like the generations before them, they prefer to rent before they buy or, due to the current economic climate, they might be unable to buy," says Sibiya.
How much is rent?
Phindi Mphahlele, the other co-owner of Seeff's branch in Soweto, says rental rates in Soweto at the moment are around R2 500 per month for a one-bedroom apartment, R4 000 per month for a two-bedroom apartment, R4 500 per month for small homes and R7 000 per month for large homes with two garages and possibly a swimming pool as well.
The greatest rental demand is for property priced between R4 000 and R5 000 per month. Tenants prefer to be on the ground floor with easy access to a small garden or outside space as the demand for upstairs townhouse units is low, according to Sibiya.
Soweto has 37 suburbs and areas with the most affordable rental rates include Protea Glen, Bram Fischerville and Lufhereng and the most expensive rentals can be found in Diepkoof, Pimville and Dhlamini.
Areas such as Pimville, Diepkloof and Orlando are in especially high demand because of their proximity to amenities and workplaces.
"Protea Glen and Mndeni, for instance, are not as popular due to the fact that they are a bit further away from everything, but reasonable rental rates are the norm here," says Sibiya.
Developments like the Lufhereng Development, Elephant Eye and Retlosebetsa are contributing to the rental offering in Soweto.
"Completed developments, the upgraded road infrastructure, the Rea Vaya bus system and commercial infrastructure have all added to making Soweto a place where more people want to invest and live – which was not necessarily the case two decades ago," says Mphahlele.
What's in demand
Janus de Jonge, broker/owner of RE/MAX Town and Country, agrees that the largest generation applying for rental homes in Soweto are millennials.
"Millennials are moving out of their childhood homes and prefer to rent before they buy. Rental properties ranging from R3 800 to R5 500 attract the most demand," sayd De Jonge.
"Proximity to amenities and workplaces contribute to the high demand. University of Johannesburg Soweto campus is located near Pimville and Klipspruit, which has made both these suburbs a popular option for student rentals.”
According to Sibiya, prices for student rentals in these areas range between R2 500 and R3 000 per month.
Maxine Miller, head of listings and valuations at PropertyFox, says, at the moment, Soweto is very affordable, and one can rent a newly-built three-bedroom home from R 5 000 a month.
"Soweto is also conveniently closer to the Johannesburg CBD," says Miller.