How to know whether to buy or rent

A thread on X went viral this week. A guy named Thendo Muloiwa shared that he had spent two years renting a flat in Victory Park, Johannesburg, for R12 000 a month. His landlord had listed the unit for sale at R1.4 million. Thendo did the math (out loud, for all of X to see). What he found was uncomfortable reading for anyone who has been told that buying property is the golden path to wealth. His numbers were blunt when he typed that bond repayments at prime would run at R14 479 a month. Add levies of R2 500 and rates of R1 200 and the total cost of owning the flat comes to R18 200 a month. Compare that to the R12 000 he was paying to rent the space and suddenly the “Why rent when you can own?” crowd goes silent. To make matters worse, the previous owner paid R1.375m for the unit in 2018. Seven years later, it’s listed at R1.4m — an appreciation of R25 000. That’s not a typo: R25 000 in seven years on an asset you were paying bond interest on. Then Thendo hit the real eina button: some of the units had been sitting on the market since 2024, with no buyers. You obviously can’t eat paper profits or an illiquid asset nobody wants to buy. Is renting smarter than buying? Not exactly. Here’s the most honest way I can answer: it depends on where you buy, what you pay and what the city around your asset looks like. Let me put it to you another way. The same property in different cities in South Africa will give you different outcomes. Cape Town’s property market has appreciated aggressively over the past decade. According to FNB’s Property Barometer, the city’s average house price growth has consistently outpaced inflation and the national average. In some suburbs, property values have doubled over the past 10 years. People who bought in Woodstock or Observatory in 2014 are sitting on real wealth today. Johannesburg? That’s a different story. Particularly in sectional title flats, like the type Thendo was renting. Prices in many areas have gone sideways or backwards in rea