The rental market in South Africa is expected to show minimal growth this year. This is because of the combination of high vacancy rates and economic pressure on tenants.
Gerhard Kotze, MD of RealNet said that most landlords and rental agents will apply strict credit checks and rental record check and will likely increase the deposit requirements.
“A very large number of quality tenants have become buyers in 2020 due to lower interest rates, and on top of that landlords have had to contend with extensive non-payment issues due to the economic effects of Covid-19 pandemic and lockdown, so they are already very cautious when it come to new tenants” Kotze said.
The bulk of citizens that are likely to look for a rental place now are those who already have at least some financial difficulty. According to Kotze, many rental property owners will also be selling their property.
tameTIMES spoke to Richard Blignaut, CEO of City & Suburbs Realty. Richard said that home owners were under immense pressure and are moving into their own properties to escape financial ruin. Home owners are also more likely to negotiate the monthly rental fees. The rental market for properties between R8 000 and R12 000 is huge. People that can afford a higher monthly rental also opt for this price range to keep options open for them to immigrate or to work from home.
Statistics on the Tenant Profile Network (TPN) shows that 60.74% of tenants did pay their rent on time during the last quarter of 2020, while 9% of all tenants are not paying rent at all.