In the first six months of the year there has been a marked increase in rental activity in Durban, as people pinched by rising costs look at their options.
Our Durban rental scenario is in keeping with the national perspective where landlords in the less than R300 000 property bracket are receiving average gross yields of up to 13% which decreases as property values increase to around 6,3% for properties in the R1,5 million and upwards category.
Landlords in trying to recover the additional expenses, such as higher rates imposed by the separate rating of sectional title flats, from tenants are raising rentals above what the market is prepared to pay. As a result it is increasingly difficult to let flats which are considered over priced. The Wakefields Beach branch says this situation is particularly obvious on North Beach where rentals in excess of R3 500 are common.
Landlords should remember that as much as they are feeling the effects of inflation so are tenants. Although the rental market is strong people are shopping around for the best rental option before settling on a particular property.
In the beach area, CBD and Esplanade landlords are achieving between 8% and 12% return on rentals, where bachelor flats average between R2 200 and R2 700 a month, one bedroom flats average up to R3 200 a month and the average rental for two bedroom flats is between R3 500 and R4 200 a month.
In the greater Berea area we have a wide range of properties from a furnished one bedroom loft apartment at R2 900 a month, to two-bedroom flats from R3 800 a month and three bedroom flats from R5 000 a month. Three bedroom duplexes are letting from R6 000 a month while houses are letting from R6 500 a month.
Wakefields opened a new letting office in Hillcrest during May. We are finding that many sellers have switched to letting their properties and we have a number of good properties to lease with an option to buy,” said Wakefield.
Rentals in the Hillcrest/Kloof area vary from around R2 000 a month for a bed-sit to R4 800 for a two bedroom flat as well as townhouses and houses between R6 000 and R15 000 a month.
In Pinetown demand is for central property to shopping centres and bus or taxi routes in the R2 500 to R4 000 price range, which is the flat and townhouse market where there is currently little stock. House stocks have built up but because of affordability there is little demand in the R5 000 a month and above price range.
Rental pickings at the Wakefields Pinetown branch are a one bedroom central flat at R3 200 a month, two bedroom flats from R3 500, three bedroom simplexes from R4 000 month and three bedroom houses from R5 000 a month.
By Keith Wakefield CEO of Wakefields Estate Agents.