It’s often said that if you’re renting, you’re paying off someone else’s bond. By implying rent is somehow wasted, ownership is cast as inherently superior. In reality, it’s not quite so straightforward. If it were – affordability and other factors aside – more households would be buyers rather than tenants, because who would say no to holding on to an asset? And yet, we’re seeing more circumspection, as clients who would ordinarily be in the market to buy are effectively flipping the script on the classic saying.

A closer look reveals the reasons, and they’re very much tied to location and segment.

At entry level, bond repayments and market rentals are often close enough that ownership is the obvious long-term play. At the top end, the gap is massive: in Johannesburg, financing a R6 million home can cost R30,000 more per month than renting it.

Yet things are not as clear-cut in Cape Town, which throws up an anomaly: inflated rentals driven by the short-term letting market, make property ownership appear more affordable. However, looming regulations – mirroring international clampdowns on the sector – could change that.

That contrast captures the reality of South Africa’s current housing market, which has always suffered from a north-south divide: property in Cape Town has historically been more expensive than Gauteng, where buyers get far more bang for their buck.

The affordability equation

Bond repayments are only one part of ownership. Add transfer duty, conveyancing fees, rates, levies, insurance and maintenance, and the true cost rises swiftly. Tenants might avoid those expenses, but they are subject to annual escalations and miss out on the wealth-building effect of equity. Stats SA reported that South Africa’s GDP grew just 0.1% in Q1 2025 compared with the previous quarter, underscoring sluggish conditions.

Residential transaction volumes are still well below pre-pandemic levels, reflecting tighter credit and consumer caution. Interest rates might have eased somewhat as the Reserve Bank cut the repo rate to 7% in July 2025, but affordability is still stretched.

Nationally, house prices are climbing, though unevenly. Stats SA’s latest Residential Property Price Index (RPPI) shows that between March 2019 and August 2024, prices rose 35.5% in the Western Cape versus 16.4% in Gauteng.

On the rental side, conditions have shifted significantly. The PayProp Rental Index recorded average national rental growth of 5.6% year-on-year in Q1 2025, with the Western Cape far ahead at 9.6% of the rest of the country, while Gauteng lags at around 2.9%.

This regional divergence explains why renting looks affordable in Johannesburg, while in Cape Town higher rents – and increased demand – have made ownership appear more competitive, despite steep property prices.

In Johannesburg’s Fourways, for example, an entry-level 84m² apartment priced at R830,000 carries a monthly bond repayment of about R8,300, compared with a rental of R9,500, which shows that buying can work out cheaper. Yet in Cape Town’s Claremont, a 65m² flat is likely to set you back R2 million.

That requires payments of nearly R20,000 a month on the bond, while the same unit can be rented for closer to R13,500. Same country, different outcome. With Western Cape prices outpacing Gauteng by more than double since 2019, ownership has been a far stronger long-term play.

In the R2.5 million bracket, results are mixed. In Claremont, ownership often comes out ahead: a R2.995 million home costs R29,901 per month on the bond, compared with R35,000 to rent. In Fourways, the picture is different: A R2.595 million property costs R25,908 to finance, but R24,000 to rent, so it’s slightly cheaper. But another home in the same suburb might cost R2.09 million, with R20,866 on bond repayments as opposed to R26,500 rent, making ownership the clear winner.

These mid-tier homes are what Lightstone calls the “workhorse” of the market: the High Value (R700,000 to R1.5 million) and Luxury (R1.5 million) bands accounted for two-thirds of transactions in the property intelligence firm’s Q1 2025 data reveals, underscoring how much activity sits in this space.

Sheer luxury

At the top end, the numbers flip decisively. In Fourways, a R5.9 million home costs almost R59,900 a month to finance, while rentals range from R27,000 to R50,000. Renting as opposed to buying (which also attracts over R500,000 in transfer duty) can therefore save more than R30,000 each month. With Gauteng house prices flat – Johannesburg’s RPPI even slipped -0.6% year-on-year in July 2024 – there’s little capital appreciation to justify the outlay.

Claremont is the outlier. A R5.6 million home costs R55,909 on the bond, but rents for R65,000 to R105,000 a month. A R4.89 million property requires R48,821 a month to finance, but fetches rent of around R100,000. These elevated rental levels are tied to Cape Town’s short-term letting market, but if regulation curbs Airbnb-style lets, this premium could disappear.

The real lesson

The idea that “renting means paying off someone else’s bond” is too simplistic. At the entry level, especially in Gauteng, buying is often cheaper and sets households on a path to asset growth. In the mid-tier, the answer depends on tenure and location. At the top end, particularly in Johannesburg, renting makes more financial sense. In Cape Town, higher rental inflation complicates the picture, but even that advantage could be temporary.

Our advice is to look at the numbers honestly. If your bond, plus full costs, sits close to market rent and you plan to stay for five years or more, buying is usually the better option. If the gap is wide and your horizon is uncertain, renting preserves cash flow and flexibility.

The debate around renting or buying is not as clear-cut as it might seem. As with many things in life, the answer is: it depends.