Landlords has been forced to lower their asking rent due to a dip in demand for rental accommodation. This comes after a number of estate agents, including rentproperty.co.za, announced that the latest figures show a 10% drop in asking rentals over the past six months, from an average of R6,854 per month in the first quarter of 2008 to R6,133 per month in the third quarter of this year.
According to Pierre Fourie, CEO of rentproperty.co.za, this can only mean that tenants are feeling the strain and have therefore either downgraded to cheaper accommodation, or moved in with friends or family. Another factor influencing the market is the sudden increase in rental stock available due to homeowners struggling to sell their properties and inevitably moving it to the rental market.
Property management group, Trafalgar, has also seen a surprising dip in rental demand. According to their managing director, Andrew Schaefer, 12% and 15% increase were reported in the first quarter of this year. This has now changed to the standard 10% annual rental increase. Andrew also added that units priced at more than R4000 has been hit the hardest due to tenants downgrading to cheaper options.
This slowdown in the rental market has been met with surprise by most agents and homeowners, which were expecting the exact opposite. The general view was that most would-be buyers would be forced into renting considering the high interest rates and the introduction of the National Credit Act.
The information in this article is courtesy of Joan Muller, “Rental Demand Dips”, Properyty24, October 22, 2008.
Buy property for sale in South Africa
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment