As inflation and rising interest rates dim the attraction of residential property purchases, and slowly recovering employment statistics improve demand for formal residential rentals, it appears the worst may be over for South Africa’s rental market.
Having suffered weak demand leading to record vacancies and rock bottom escalation during Covid, rental investors will doubtless welcome this change of tide. According to Jacqui Savage, National Rentals Manager for the Rawson Property Group, the road ahead is not without a few bumps, however.
This, she warned, could see an increase in late rental payments and a decline in tenants in good standing – a trend that has already begun, according to the latest TPN Rental Monitor report. For the first time in seven consecutive quarters, the R7,000 to R12,000 bracket saw no improvement in tenant payment behaviour. The R12,000 – R25,000 bracket, on the other hand, showed continued recovery reaching over 86%, while the R25-000+ bracket breached 80% for the first time in five years.
In terms of rental strategy, Savage said that stability should still be the ultimate priority for landlords in the coming months.
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