Although there is a ‘small uptick’ in rental enquiries, low affordability and unfavourable credit checks of potential tenants remain a concern in the rental market.
In the northern suburbs of Johannesburg, there is reasonable demand for rental properties, with the sweet spot being those priced between R10 000 and R35 000 per month.
There is a high demand for rental properties priced between R6 500 – R16 000 per month in the Fourways areas such as Lonehill, Sunninghill, and Douglasdale.
“Properties in the R6 500 to R8 500 per month price range are very popular with young professionals, and sometimes students, with a lot of activity in the R10 000 to R16 000 price bracket rented out by local families and young couples,” says Cindy de Beer, Pam Golding Properties rental manager for Hyde Park and Fourways offices.
De Beer notes that in the greater Fourways area, at least 40% of rental deals concluded are of properties priced below R20 000 per month, with a reasonable percentage of deals concluded in the R20 000 to R35 000 per month price bracket.
In suburbs such as Bryanston, Rivonia, Killarney, Morningside, Parkwood, Parktown North, Parkview, Parkhurst and Woodmead among others, covered by the Hyde Park office, 70% of rental deals, from a value point of view are priced between R10 000 to R35 000 per month, which provides a range of properties to prospective tenant.
“When combining these two offices, 65% of the rental business comes from rental stock priced up to +R35 000 per month.”
She explains that there is a good selection of stock to choose from, with tenants signing lease agreements of 12 months, while others are happy to sign 24-month lease agreements.
“The rental market, in general, has been under pressure, reflective of the slow growth in the economy, as a result, the lower end of the market - those properties priced between R6 500 and R8 500, in certain areas, particularly in Fourways, are seeing good demand,” she says.
In Midrand, the rental market remains buoyant as young people entering the job market need a place to stay, and they find that Midrand is still reasonably affordable when compared to other Johannesburg North suburbs, says Nadia Moosa, Pam Golding Properties Midrand branch manager.
“Rentals are priced from R5 000 per month for studio apartments and from R5 500 per month for one bedroom apartments, with demand for properties priced between R5 000 and R7 000 in suburbs such as Noordwyk, Erand Gardens, Sagewood, and Vorna Valley high,” says Moosa.
Although there is still activity in the corporate and high end of the market, this has since slowed as some corporate budgets are constrained in the current economic climate, with some monthly rental budgets pegged at a maximum of R40 000 per month, and sometimes lower.
“Corporate tenants including expats, who make direct contact with Pam Golding Properties rental agents tend to prefer The Parks, which includes Parkview, Parkhurst, Parkwood and Parktown North as these areas are close to the Deutsche Internationale Schule Johannesburg, Sandton and Rosebank CBDs, with numerous amenities close by. In addition, the French School in Riverclub is a drawcard for surrounding areas. Here, they pay monthly rentals of between R25 000 and R45 000,” says De Beer.
She points out that The Parks, which comprise of Parkhurst, Parkview, Parkwood, and Parktown North is very popular in general with those looking to rent.
In the Midrand area, corporate rental prices which can range from R25 000 up to R65 000 per month, depend on company policies, the position of the applicant (tenant) in that particular company and the size of their families, explains Moosa.
Upmarket properties in Kyalami Estate, Waterfall Country Village and Waterfall Country Estate are very popular with the corporate market with those priced between R30 000 and R40 000 snapped up as soon as they are listed.
Says Moosa: “Although most tenants sign one-year lease agreements, some, especially corporates, tend to sign two-year lease agreements as they don’t want to have to move once the 12-month lease expires.”
Furthermore, she says Kyalami Estates, Waterfall Country Estate, Waterfall Village Estate and Saddlebrook Estate are in demand as they offer a secure lifestyle environment, and are also close to the American International School of Johannesburg.
“We have a significant share of the corporate market with a wide range of lifestyle properties priced between R25 000 to R70 000 per month to choose from in, Fourways. Properties sought after are priced between R38 000 and R48 000 per month in suburbs including Dainfern, Helderfontein Estate, Cedar Lakes and Fourways Gardens,” says De Beer.
De Beer points out that very few locals look for rental homes priced above R30 000 per month. For those who cannot the right properties in these areas, they tend to look at Waterfall Estate, and those in Midrand who do not find the right properties for their needs, take up rental opportunities in Dainfern Golf & Residential Estate.
Although landlords are becoming more reasonable on rental expectations, price counseling remains the core conversation between agent and landlord.
“Across the board, there are a substantial amount of tenant applications being declined due to low affordability. Other reasons include unfavourable credit checks as a result of judgement or defaults on the applicant’s profile, as well as poor payment history on various accounts held by the applicant.”
Despite this, she adds that there is still a high demand for well-priced properties in more affluent suburbs, and these are snapped up as soon as they are listed.