Whatshot
Prime Property
Prime Property
After an extended period of slow growth in the South African rentalmarket, indications are that the tide has turned for the better withPayProp's Rental Index for Q1 2019 showing a clear positive change.
Rental growth statistics appear tohave reached a crossroads at the end of last year and have begun to stabilise. In the last three months of 2018, the rental growth rate came in at 4.1% (up from 3.3% in Q3) - although this is still low, it has still shown a favourable increase in the national rental growth rate versus the last two-year period.
Rental homes make up about 43% of the total residential property stock in KwaZulu Natal, Ballito has been found to be the best performing town in the region in termsof rental returns. The most popular homes among tenants are located in secure estates with size ranging from one-bedroom apartments to four-bedroom family homes.
Changing economic times, and a relative abundance of rental properties on offer, means tenants tend to negotiate on rentals, rarelypaying the advertised price without a negotiation. Being cyclical, the rental market naturally goes through periods of growth, decline and phases of stability.
Finding the right tenant has also become key when understanding the current economic climate. The importance ofthoroughly checking tenant applicants before placing them is crucial, given thatPayProp's statistics show that nearly 40% of tenancy applications in Q1 wereclassified as either high risk or very high risk.
Stance for the rest of 2019 - There is cautious optimism that despite the delicate market and added complications of a tougher economic situation, the growth trend in the rental market is foreseen to steadily continue throughout the year. Landlords are advised to adjust to this changing market in order to reap its full benefits and returns.

