Rental demand spikes on the Atlantic Seaboard and Cape Town city centre

Rental demand in the city bowl and surrounds has spiked by 30 percent since the start of summer says Seeff Atlantic Seaboard and City managing director, Ian Slot.

Short-term rental demand had rocketed ahead of the Mining and Design Indaba and the opening of Parliament. By the first week of this year, we had already concluded 42 new leases with many more in the final stages. We have also just concluded the highest rental in on the Atlantic Seaboard at R170,000 per month for a luxurious, seven-bedroomed villa in Geneva Drive, Camps Bay.

Slot attributes the buoyancy to constrained economic and mortgage lending conditions and expects the latest petrol price hikes to drive even more tenants towards the city and surrounds. It is also not just the middle income that is renting now, but upper income earners as well, continues Slot. Of the 457 rentals that we concluded last year, 54,7 percent was in the price range of between R7,000 and R12,000 per month while 29 percent ranged between R12,000 and R20,000 and 16,3 percent above R20,000 per month.

Long-term rentals make up the bulk of our business and we are facing significant stock shortages across all price bands and areas, adds agent Vivien Adler. In addition to the usual spike in new entrants early in the year, many who had had hoped to buy this year are rather renewing their leases. Consequently, stock that would normally have come back into the market is now not available.

In the CBD, one bedroomed units are especially in demand says agent, Jules Arnott. These are sought by students, young professionals and both young and middle-aged married couples. Many are opting to rent at a monthly cost of about one third of home ownership if you factor in bond repayments, maintenance and rates and taxes. Rentals range from around R6,000 per month for an older unfurnished apartment and R6,500 if renovated while furnished units go for about 35 percent more.

Houses and apartments that offer two or more bedrooms at monthly rentals of between R7,500 and R14,000 per month are especially in demand in the surrounding suburbs adds agent, Elzunia Singer.

In the suburbs of the Atlantic Seaboard, location and views remains an important consideration with tenants that range from corporates to professionals and families advises Adler. Sea-facing apartments in Sea-Point range from around R12,000 to R15,000 per month for a two-bedroomed unit with a communal pool while units on the marina at the V&A Waterfront start at around R25,000 per month. Townhouse and house rentals in Clifton, Bantry Bay, Fresnaye and Camps Bay start at around R25,000 per month.

Some of the highest monthly rentals achieved in the city during the past year include R35,000 for a De Waterkant apartment in December, R26,000 for a Tamboerskloof house in mid-2011 and R27,000 for a Three Anchor Bay apartment. Units in Greenpoint and Sea Point achieved a top rate of R20,000 and R34,500 respectively. A Camps Bay house was let out at R80,000 in a deal concluded late last year while a Clifton house fetched R50,000 in a deal concluded in mid-2011. December rentals included R80,000 for a V&A Waterfront unit and R34,000 and R35,000 per month for houses in Bantry Bay and Fresnaye.

Current annual escalation rates range between 5 and 8 per cent, but rental rates are under pressure and landlords need to be aware that while there is demand out there, they need to price in line with what the market is prepared to pay concludes Adler.

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