Rental demand soars in Witbank

Demand for small units is particularly high, says Sharlene Doogan of the local RealNet estate office. "Once again, cost is a factor and with the cheapest units now commanding rentals of just under R4000 a month, tenants tend to shy away from family homes and target flats, apartments and townhouses instead."

Although there is steady demand among prospective buyers for homes in the R600 000 to R900 000 price range, not many sales are concluded because most buyers struggle to come up with the required 10% deposit to obtain home loans - and find it difficult to save enough additional cash for related costs such as bond registration and transfer duty, Doogan says.

Bachelor flats are currently the cheapest rental units. Monthly rentals start at around R3800, while more upmarket one-bedroom apartments achieve average rentals of R4200 a month.

Two-bedroom apartments are rented out for around R5000 a month while rentals for two-bedroom townhouses range between R5000 and R8000 a month, depending on location.

The tenant profile is diverse and includes entrants to the labour force, young couples and retirees, as well as upgraders and downgraders who rent while shopping around for good value before they buy new property.

Doogan says the high demand has pushed rentals up by between 6 and 8% in the past year and adds that the trend is likely to continue, unless conditions change to allow more own buyers to enter the market or more developers to launch new units. "As it is," she says, "rental stock is scarce and available units are usually taken up within a week.

"This creates long-term investment opportunities for prospective landlords. Purchase prices of rental units in high demand currently start at about R400 000 for one-bedroom apartments and from R620 000 upwards for two-bedroom townhouses."

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