Property · rent or buy
Rent or buy — which leaves you richer?
On a R1.8m house, transfer duty and attorney costs take about R103 000 the day you sign. Put the home you are weighing up against renting a similar place and investing the deposit, and see each side’s net worth year by year — and the year buying pulls ahead, if it does.
How we calculate it
- Buying starts in a hole: transfer duty and attorney costs are gone on day one — the deposit is not; it becomes part of the home.
- The renter invests what the buyer put down — the deposit, the duty and the attorney costs — at the return you set.
- Every year, whoever pays less invests the difference. Buying costs the bond, rates, levies and maintenance; renting costs the rent.
- Net worth: the buyer has the home less the bond still owed, plus anything invested; the renter has the investments. Where the two lines cross is the break-even year.
- Cost to Own = what the money went on, plus the interest it could have earned, less what you still own. For buying that is duty and attorney costs, bond interest, rates and levies, maintenance and lost interest, less what the home gained in value; for renting it is the rent and its lost interest.
- Rand as spent, not today’s money; selling costs (agent’s commission), tax on investment growth and insurance are left out.
We calculate; we never name a bank, a bond originator or an estate agent. If you might sell before the break-even year, renting usually wins — buying and selling both cost money.
Where the typical figures come from
- Transfer duty: SARS, from 1 April 2026 (unchanged from 2025/26) — nothing up to R1 210 000; 3% of the part above R1 210 000; R13 614 + 6% above R1 663 800; R53 544 + 8% above R2 329 300; R106 784 + 11% above R2 994 800; R1 241 456 + 13% above R13 310 000. SARS, Transfer Duty.
- Attorney and Deeds Office costs: transfer and bond registration fees plus the Deeds Office came to R85 812 on a R2m bonded purchase and R163 796 on R5m (LSSA guideline from 1 July 2026). Each preset’s figure is interpolated between those two — an estimate; the bank’s initiation fee is not included. MJK Inc, transfer costs.
- Interest rate — Low 9.75%, Moderate 10.75%, High 11.75%: prime is 10.75% since the Reserve Bank raised the repo rate to 7.25% on 23 September 2026; Low is prime less 1 (our estimate of a good-credit deal); High is prime’s 2023–24 peak. eNCA, SARB decision.
- Property prices: Starter flat R1 000 000, Townhouse R1 400 000, Family home R1 800 000, Upmarket R3 500 000. First-time buyers paid just over R1.4m on average in July 2026 and ooba’s average purchase price was R1.77m (Q2 2026); ooba puts Gauteng one-bed flats at R800 000–R1.2m and executive homes at up to R3.5m. ooba, property prices 2026; BusinessDay, July 2026.
- Rents: R8 500, R9 000, R11 500 and R20 000 a month — a 7–8% gross yield, ooba’s national norm (Starter flat 10.2% and Upmarket 6.9%, our estimates), checked against PayProp’s national average rent of R9 715 (Q2 2026). IOL / PayProp, July 2026.
- Rent increase — Low 4.1%, Moderate 4.7%, High 7.4%: national rental inflation mid-2026, PayProp’s national figure for Q1 2026, and PayProp’s Western Cape figure. PayProp Rental Index, Q1 2026.
- Property growth — Low 4%, Moderate 5.2%, High 6%: FNB’s forecast for the end of 2026, its repeat-sales index for June 2026, and its Q1 2026 average. IOL / FNB, July 2026.
- Our estimates, not sourced: rates (about 0.95% a year of the value above the R300 000 residential exemption), levies (R1 800 flat, R1 500 townhouse, R2 500 estate), maintenance, the 9% return on the renter’s investments, and every preset’s attorney costs. Use your own quote, your own rates bill and a real rental listing.
Selling costs are left out: an estate agent’s commission (often 5–7.5% plus VAT) would push the break-even year later. Insurance and tax on investment growth are left out too. Calculations, not advice.