Durban suffering from house rental crisis

Charles Alterskye reports a dearth of houses to rent below R6000
Fuelled by the 25-year low in interest rates and the buy to let craze Durban is suffering from probably its lowest ever number of houses to rent in the affordable suburbs and the situation is expected to deteriorate even further, according to an article in March 26 edition of the Sunday Tribune.

A recent survey by the paper’s Property Guide of rental agencies servicing the suburbs of Amanzimtoti, Bluff, Pinetown and the Old Main Line established extreme shortages of freestanding homes for rent below R5 000. Townhouse and flats were generally available although some areas, such as the city’s south and north beaches, while at full stretch in meeting rental demands, appeared to be generally coping.
Paul Nundhkumar, letting manager of Wakefields Property Management, confirms the housing rental shortage throughout the greater Durban area. Mike Bennett of Proprop classifies Pinetown’s shortage as dramatic adding that houses advertised below R5 000 in the area could be let a hundred times over. Conversely landlords seeking tenant rentals between R6 000 and R7 000 draw little interest.

In Amanzimtoti, Charles Alterskye of Acutts Amanzimtoti Coastal reports a dearth of houses below R6 000 with calls streaming in daily for houses up to this mark. Doug Buchanan franchisee of Just Letting for the areas of Mosley Park through to the Bluff and including the Old Main Line, Montclair and Woodlands puts the housing shortage at “extreme” in these areas.

Clearly, the main reason for the shortages stems from widespread tenant conversion to ownership and the flood of first-time buyers enabled by the interest rate lows. The scarcity is further compounded by properties in high profile areas being converted to business or work-from-home use.

More ominous, but of substantial impact pointed out by Alterskye is that one of the rental market mainstays in the past came from sellers unable to sell moving their homes into rental pools. This source, which accounted for about 25 percent of stock at any given time, is now in the wake of massive market take-up, according to Alterskye, almost non-existent.

It is also apparent that the many years of developer concentration on multi-unit developments at the expense of single dwelling construction is now taking its toll on the supply of saleable and rental stock of freestanding homes. What little housing stock is available appears to have been generated by the buy to sell trend, but this when measured against this concentration in new developments, which was hurried along by transfer duty exemption and the availability of 100 percent bonds, is very low. Developers link up to 40 percent of sales to investor activity during the peak of the recent boom.

Would be tenants focussing on apartments and townhouses should have few problems in the affordable suburbs, according to Wakefields’ Nundhkumar. Demand bottlenecks were being prevented in Durban’s south and north beaches, according to prominent letting agency Neil Schwarz by good co-operation between rival letting agencies. Average rentals, according to Schwarz, are around R1 400 for a bachelor, R1 700 for a one bedroom and between R2 200 to R2 500 for a two-bedroom in south beach. This is slightly higher at north beach with one-bedroom apartments at R1 700 and about R2 500 for a two bedroom in north beach.

Paul Nundhkumar quotes Pinetown stock at R1 800 for upmarket bachelor, R2 000 for a one-bedroom; R2 500 for a two-bedroom and R4 000 for a three bedroom apartment. Toti’s prices, according to Alterskye, are R1 800 to R2 000 for a bachelor; R2 000 to R2 500 for a one-bedroom and R2 500 to R3 000 for a two bedroom.
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