How to negotiate a fair rental increase in South Africa

Rental increases are a reality for most tenants, but they shouldn’t feel arbitrary or one-sided. In South Africa, there is no fixed “standard” percentage for annual increases, which means every escalation should be reasonable, market-related, and open to discussion.

In 2026, this matters more than ever. Rental growth has stabilised, but affordability pressures are rising — making negotiation a key part of the rental process for both tenants and landlords.

There is no “standard” rental increase

One of the most common assumptions in the rental market is that a 10% increase is the norm. In reality, there is no legislated percentage or universal benchmark. Rental escalations should be guided by current market conditions, not outdated rules of thumb.

And in today’s market, those conditions are clearer than ever.

Recent data shows that rental growth in South Africa has settled into a more moderate range. By early 2026, increases are generally expected to land between 4% and 6% annually, with many forecasts clustering around 4.5% to 5.5%.

This effectively resets expectations. If you’re being asked for a significantly higher increase, it’s reasonable to question whether it aligns with the broader market.

What actually determines a fair increase?

A fair rental increase is shaped by a combination of market forces and practical realities. The most important factor remains what similar properties are currently renting for.

National data support this shift toward moderation. After a strong rebound period, rental growth in 2025 averaged around 5% to 5.6% year-on-year, with average rents exceeding R9,000 nationally.

This tells us two things:

• The market is still growing
• But it is no longer accelerating rapidly

At the same time, affordability is becoming a more important constraint. While tenants have shown resilience, with over 83% in good standing, financial pressure is starting to build beneath the surface.

This creates a more balanced negotiation environment than in previous years.

The shift in tenant affordability

One of the biggest changes heading into 2026 is the growing tension between rental growth and affordability.

On paper, the market looks stable. But underneath that stability:

• Arrears have started creeping up again to around 17% of tenants
• Debt levels among rental applicants are increasing
• Lower-income segments are under more pressure

This is important in negotiation. It means landlords are operating in a market where:

• Tenants are still paying — but with less flexibility
• Replacing a tenant carries more risk than before

For tenants, this strengthens your position. For landlords, it reinforces the value of stability.

Know your rights as a tenant

The Rental Housing Act provides a framework for how increases should be handled. Rental can generally only be increased once every 12 months, and increases must remain reasonable and justifiable.

Even if your lease includes an escalation clause, this does not remove your ability to question or negotiate the increase, especially if it appears out of line with current market trends.

How to approach the negotiation

In a 2026 context, negotiation is less about pushing back aggressively and more about aligning with the market.

Start with evidence. If national rental growth is averaging around 5%, any proposed increase above that needs to be supported by strong justification, such as upgrades, exceptional demand, or a below-market starting point.

Your value as a tenant is equally important. In a market where arrears are rising and affordability is tightening, reliability carries more weight than ever. A landlord may accept a lower increase in exchange for consistency and reduced risk.

When responding, avoid outright rejection. A well-positioned counter-offer that is grounded in data and framed constructively is far more effective. This could be a slightly lower percentage, a capped rand increase, or even a longer lease in exchange for a reduced escalation.

Timing also plays a role. The earlier the conversation starts, the more flexibility both parties have.

Understanding the landlord’s perspective in 2026

Landlords are not operating in isolation; they are responding to rising costs, economic uncertainty, and shifting tenant dynamics.

But the data highlights a key reality: while rental growth remains positive, it is no longer accelerating. At the same time, affordability pressure is increasing, and arrears are edging higher.

This creates a more cautious environment.

In practical terms, pushing for above-market rental increases may result in:

• Longer vacancies
• Higher tenant turnover
• Increased financial risk

In many cases, a stable tenant at a slightly lower rental delivers a better long-term return.

When negotiation doesn’t work

Not every negotiation leads to an agreement. If common ground cannot be reached, tenants may need to decide whether to accept the increase or move.

However, in a market where average rentals are already above R9,000 and rising steadily, moving does not always guarantee savings.

This makes negotiation, even if it results in a compromise, one of the most valuable tools available.

The bottom line

A fair rental increase in 2026 isn’t about hitting a specific percentage; it’s about aligning with the market.

Right now, that market is characterised by:

• Moderate growth (around 4%–6%)
• Increasing affordability pressure
• A stronger emphasis on tenant stability

For tenants, this creates space to negotiate. For landlords, it reinforces the value of retention over short-term gain. The best outcomes happen when both sides recognise the same reality and work within it.