Western Cape property rentals robust

According to the most recent TPN Rental Payment Monitor, 86% of South African tenants were in good standing in 2014 making last year a positive story for both tenants and landlords alike.

“The Western Cape continues to be the province with the most tenants in good standing, coming in at 89%,” says Shaun Groves, newly appointed National Rental Manager at Jawitz Properties.

The most volatility is found at the lower and top ends of the rental market, where landlords need to be cautious when taking on new tenants.

“It is advisable that landlords use an established rental agency with high levels of quality control. Reputable agencies use every mechanism at their disposal, including multiple credit bureaus and acquiring bank codes through the applicants own banking institution to gauge affordability,” Groves adds.

While the average rent in the Western Cape is just under R6000 per month according to TPN, a wide range of rentals is available for every pocket, though stock moves fast if it is priced correctly as demand is so high.

Entry level on the Atlantic Seaboard is around R6, 500 to R7000 per month to rent a bachelor apartment. “There is really nothing on offer under that price at this stage and it can go as high as R100 000 per month for large, luxurious properties. The average in the area, however, is between R10 000 and R20 000 for a one- or two-bedroom apartment,” Groves says.

There are many micro markets on the Atlantic Seaboard where prices can even differ when one apartment block is compared to another on the opposite side of the same street.

Rentals in the City Bowl are on a par with the Atlantic Seaboard.  Long-term, unfurnished bachelor apartments  are priced between R6, 500 and R7, 500 per month, while one-bedroom units attract between R8, 500 and R9, 500 and two-bedrooms are at R10 000 or R11 000. Three bedrooms are hard to come by but are priced at R14 000 to R15 000 per month.

New development, Queensbury, in Higgovale has a two-bedroom apartment for R18 000 per month, while in Woodstock, another development sees a two-bedroom going for R11 000 per month. It really depends on the location and features.

“We find some parents are looking for accommodation for their student children, but the majority of tenants are young, professional couples and singles.”

The Southern Suburbs is quite different where Constantia and Bishops Court generally offer rental options for R30 000 per month while in other areas a bachelor apartment can range between R2 800 and R3 300 per month, a one-bedroom around R4000, two-bedrooms from R5 800 – R6 500 and three-bedrooms upwards from R7 500. Rental prices change from area to area.

A townhouse could go for R15 000 - R20 000 in areas like Meadowridge or Tokai, while a smaller property such as a two-bedroom semi-detached could go for much more in other areas. One such example is a recent, modern listing in Newlands for R22 000 per month, while a property the same size with similar features could go for as little as R8 000 per month in Wynberg, as the area attracts lower rentals.  Generally it’s smaller families and professionals who are looking to rent in the Southern Suburbs.

Location remains key and tenants look at the position of the property, the state of traffic and proximity to schools or other amenities as important factors when deciding on where to rent.

“So while there is certainly buoyancy in the market, landlords must keep in mind that there is nothing more costly than a non-performing tenant, and therefore discretion is the better part of valour and landlords should make use of a reputable agency,” Groves concludes.

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