Cape Town residential rentals falter on oversupply

The growing number of conversions and developments, compounded by an excess supply of properties, throughout Cape Town were putting pressure on rentals, Trafalgar Property Management Chairman Neville Schaefer said in a August 28 media release.

The City Bowl and environs were particularly vulnerable and despite an accommodation shortage in the student market in Rondebosch, Newlands and Claremont, rentals were remaining flat.

Schaefer believed this reflected the oversupply of accommodation throughout Cape Town that would be exacerbated as the conversions and new developments came on-stream. This was also despite the growing international trend towards working and living in close proximity that was a factor in supporting higher rentals.

A specialist property management and financial services company, Trafalgar focuses on sectional title and Home Owners’ Association Management, residential letting, property financial services and commercial property management.

The group currently has more than 60 000 homes within its management and rental portfolio.

Schaefer said recent research reflected there had been a shift in City Bowl tenants towards the previously disadvantaged. Monthly rentals on one-bedroom flats ranged between R3 000 and R4 500, rising between R4 500 and R7 000 for two-bedroom apartments.

He said the southern suburbs like Constantia and Newlands were “a virtual mirror of the City Bowl” in both rentals and tenant profiles. However, the Strand and northern suburbs like Bellville and Durbanville were currently attracting the lowest rentals with the former market dominated by white renters and the northern suburbs showing a healthy mix of renters.

He said rentals in Tableview varied significantly depending on location, while the large number of new developments in mainly Parklands had pushed supply to “an all-time high”, putting rentals under pressure.

Schaefer said generally the young working set were living in the city centre or the northern suburbs depending on where they were working, while the student market was concentrated in the southern suburbs near the University of Cape Town, Red Cross Children’s and Groote Schuur hospitals and other tertiary colleges.

Young married couples were migrating towards the Tableview and Parklands areas
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