For many years the rental market in SA has yielded disappointing returns for landlords as interest rates were low and the economy was strong. The barrier to purchase homes was low and this saw returns on rentals drop to as little as 0.5%, according to Gavin Opperman, Director of ABSA Home Loans.
The current increase in interest rates, combined with economic uncertainty, and the National Credit Act has caused a slow down in property transactions, but the reverse upward swing is that the rental market is now starting to pick up.
The rental market is currently yielding fair returns for landlords and this is also encouraging for prospective investors. The FNB property barometer intimates rental inflation is around 9% and increasing. This suggests that the gap between what landlords are paying on their mortgage and what they receive as rental income will be diminishing. Good news for landlords
At Rentproperty.co.za, a free-to register centralised rental portal, we predicted the rental curve, and realised that there was a gap in the market for a centralised rental portal in South Africa, a site which offered unique critical information assisting prospective tenants and landlords to determine where to invest, and what they should pay for a property. Rentproperty.co.za currently operates in the Western Cape, with Gauteng going live shortly.
The uptake on the site has been phenomenal. In the first 3 weeks of going live, we had 1580 properties listed. These included private, intermediate and estate agency listings. The most hits in the Western Cape camefrom Claremont and Stellenbosch, where demand for rentals are traditionally high.
Other interesting facts include the fact that the most expensive property listed to rent in the Western Cape was a house in Camps Bay for R65,000.00 a month. Camps Bay has the most expensive homes to rent per month, followed closely by Fresnaye and then The Waterfront. The majority of the listings are for one to three bedroom apartments.
Furnished properties made up only 339 out of the initial 1580 listings, which is indicative of the increasing demand for furnished long term let apartments.
Rentproperty.co.za ensures prospective tenants and investors do not need to trawl through numerous sites listing their needs or property. The centralized portal is easily navigated, has a unique filtering ability so that they can instantly filter rentals in security estates or rentals that are fully furnished, for example. Alerts are sent to prospective tenants when new properties matching their requirements are listed, and estate agencies can also be alerted when landlords list properties for which they require management services.
Comparison between square meter rent yield is essential for investors looking at the rental market as it facilitates accurate analysis between areas. Rentproperty.co.za is the only site to offer a real time graph on the home page indicating the top ten areas charging the highest per square meter.
The intelligent formula accumulates the average rental per square meter per area of all the currently active listings on the site. The system is always up to date, and each new listing is automatically brought into the equation. The site currently indicates Clifton, Llandudno, and The V&A Waterfront as the top three areas charging the highest price per square meterage for rentals in the Western Cape.
By Karen Koen, Rentproperty.co.za