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National shortage in rental properties

Tenant Profile Network (TPN) has confirmed that the rental stock shortage is a national issue.

Principal of Seeff Dolphin Coast, Andreas Wassenaar, says this is not surprising considering that the national average buy-to-let statistic is only 8 percent of all sales.

'Developers were hard hit over the past five years, and very few new projects were provided for. Indicators such as Stats South Africa figures for building plans passed increasing substantially in the first quarter of 2013 will translate into more supply. In KwaZulu Natal two new large-scale projects, Manor Estates and Sheffield Manor, have been supplying new rental stock for the market in the R7 000 to R10 000 a month bracket.

'We know that more people are renting than ever before, and also that people are staying in the rental market for longer - the average age of tenants has increased from 27 to 31 years. The limited supply has been good news for landlords.'

TPN says the number of tenants in good standing rose to 84 percent for the first quarter of the year. The best-performing category is the R3 000 to R7 000 a month group, with 86 percent of tenants in good standing: 73 percent paid on time and in full, 3 percent paid within the grace period, 10 percent paid late, 8 percent made partial payments, and only 6 percent did not pay. The R7 000 to R12 000 a month category is similar but things start to drop off at the lower and upper ends of the spectrum.

The lower end (below R3 000 a month) showed 77 percent of tenants in good standing. At the upper end (above R25 000 a month) only 67 percent of tenants were in good standing.

'When we consider the behaviour of tenants by province, we see that tenants in the Eastern Cape, Western Cape and Mpumalanga performed best with 88 percent in good standing. Gauteng recorded 82 percent in good standing and KZN and Limpopo each recorded 81 percent of tenants in good standing. The lowest recorded 'did not pay' tenants were in the Western Cape and Mpumalanga at 5 percent, and the highest was in KZN at 12 percent. Wherever you are, landlords must ensure they use professional and experienced rental agents who subscribe to credit bureau service providers such as TPN,' says Wassenaar.

(Weekend Argus Sunday Edition)


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