Demand for rental property in South Africa is expected to continue to rise, according to a report by South African website property24.com.

This demand for rental properties will also drive up yields but at the moment renting is still cheaper than buying for many people because of the large deposit requested by banks.

Bill Rawson, chairman of the Rawson Property Group, told the website that buy-to-let is proving to be a good investment for many with landlords looking to buy in metropolitan areas in Cape Town’s central Southern Suburbs, Durban’s Umhlanga and Berea and most of Sandton in Johannesburg.

“Buy-to-let investors will often get a 7-8% return from day one in these areas and in select markets can look forward to a 9-12% annual (price) appreciation,” he said.

While the average rental yield nationally is 5-6% and capital appreciation is 7-8%, the returns tend to be higher in central metropolitan precincts he added.

Data from PayProp shows that the national average residential monthly rental increased by 10.8% to R5 787 (£316) at end of September 2013 from R5 221 (£285) a year earlier.