Do you own an investment property? If so, you probably took a knock during the pandemic, when the rental market plummeted. As people lost their jobs, or opted to buy with interest rates at record lows, buy-to-let properties stood empty. People working remotely and moving to cheaper areas didn’t help either, and if you were in the Airbnb or tourism business, it would have been even more difficult. Thanks Covid.
But it now looks like rentals are back to pre-pandemic levels in South Africa!
That’s according to an in-depth report by Financial Mail, who looked at a range of metrics to confirm the good news – such as vacancy rates, tenant arrears and rental growth.
The most reliable tenants in terms of payment are those in the R7,000 to R12,000-a-month bracket, where the percentage of tenants in good standing is at 87%, according to the report. The riskiest group is for rentals less than R3,000 a month, with payment rates of just 68%.
If you’ve bought property in Joburg’s northern suburbs, things will start to look up even more, according to Chris Renecle, MD of developer Renprop, which manages about 3,000 rental apartments across this area. He said there has been an uptick in the R3,000 to R20,000 rental bracket because people have returned to the office.
Cape Town, meanwhile, is seeing a demand for high-end rentals as corporates and foreigners come back, according to Dexter Leite, Pam Golding Properties’ Western Cape rental manager.
The province is still the most expensive in which to rent a property, at a monthly average of R9,399. That’s nearly double the average R5,521 it costs to rent in North West, SA’s cheapest province.
Along with the rest of the world, the rental market is finally returning to normal after a very difficult three years. If you’re looking to invest, do your homework: the trends differ over areas and brackets.
Tshego is a writer and law student from Pretoria. A keen follower of social media trends, his interests include high fantasy media, politics, science, talk radio, reading and listening to music.
He is also probably one of the only people left who still play Pokemon Go.
