|Civil servants are getting the thin edge of the wedge in the wake of the property market’s highest ever property explosion and the wedge promises to be wafer thin by year’s end if Absa’s forecast of 15 to 20 percent rise in house prices for the year materialises.|
Not only has the national surge in residential property prices distanced ownership to the realms of “never-never land” for many state employees, but rampant increases in their traditionally safe haven of renting is now forcing widespread downsizing among them with many being forced to double up with other family members.
The more than doubling of property prices in the past few years and civil servant wage increases being generally inflation linked has meant that even the lowest priced property has surged out of reach of the average civil servant income. Their plight has been further compounded by the rampant sell-off of former rental stock by landlords keen to take advantage of simmering prices.
Another telling factor working against state employees is that of the large numbers of private sector workers also restricted from home ownership by affordability now entering the rental market, and these numbers, according to Amanzimtoti’s Charles Alterskye of Brian Foley Properties are increasing all the time.
Further agony is given the civil servant’s situation by the trend of landlords refusing to negotiate on very ambitious rentals. Alterskye attributes such eagerness, or necessity, to the new wave of speculators anxious to turn their acquisitions into immediate profit centres while other landlords are taking advantage of lower market supply shortages.
In the previously popular civil servant dominated rental market of Amanzimtoti their dominance was giving way to private sector workers while many others were downsizing from single-dwellings to apartments, in one instance a 34 square metre unit with a monthly rental of R1 700.
Alterskye says asking prices present a huge problem at the moment. “The current rental affordability in ‘Toti for a free standing home is locked in between R4 000 and R5 000, but many landlords are listing at R7 000 for ‘Toti, R6 500 for Illovo Beach and R6 000 for Warner Beach, which in many instances is out of tenants price reach. “Worse still,” says Alterskye, “is that they are not prepared to negotiate.”
Current rental market entry for ‘Toti in terms of stock availability, according to Alterskye is R2 500 for an apartment and houses and townhouses about R4 500. The company only had one house on its rental book at that price, which was for a very basic three-bedroom home in Athlone Park.