Real estate group Seeff says that it is currently seeing a lot of vacant rental homes and units – and the main reason for this is that landlords are being unrealistic in their price expectations.
According to Seeff, the rental markets in Gauteng’s major metros are extremely competitive, and if a rental property is not priced correctly, it will in all likelihood remain vacant.
Charles Vining, Seeff’s MD in Sandton, says in this affluent area agents are increasingly experiencing greater negotiation on price (about a 10% reduction) when finalising a lease.
Lower rentals priced at below R12,000 per month are not negotiated as much, but higher value rentals are significantly negotiated, he said.
“Economic pressure is the overwhelming factor and tenants are budgeting carefully, saving 10% per month can make a big difference at the end of a 12 month period.”
However, not all rental markets are the same, with some being much tighter than others. Seeff broke down the highest demand prices for rentals across Gauteng.
Sandton and Fourways and Midrand
Rentals between R7,000 and R12,000 per month are in high demand in suburbs – with the R6,000 to R9,000 per month price band being the most popular.
Vining concludes that there is a lot of rental stock available in Sandton and surrounds and landlords that are unwilling to negotiate on price or inclusions are holding vacant units.
Pretoria East’s rental rates have declined in the first quarter of 2018 by about 8% to 12.5%, Seeff said.
“Tenants here have many options with the current supply of rental property and properties need to be very competitively priced to avoid vacancies, hence the drop in rental rates.
The most active price band across the board in Pretoria East is for properties priced between R6,500 and R 8,500 per month.
Randburg rental rates are also under pressure and are down by about 20%, if not more, Seeff said.
“Rental demand in Randburg has decreased because affordability is a problem and tenants don’t meet credit criteria. We are also experiencing many renewal leases as opposed to new placements.”
More expensive properties priced between R15,000 and R25,0000 per month is the most active rental range, while properties priced around R7,000 per month take a while before they are rented out, the group said.
Seeff said that landlords in Randburg are demanding higher rental prices due to rates and levy increases, but that tenants can’t afford these increases and then rather give notice.
The Centurion rental market is very strong across all bands with both private and corporate rentals, Seeff said.
The most popular price range is from R5,000 to about R8,000 per month for a one or two bedroomed apartment.
“However, in this price range a number of developers have built multi-storeyed blocks of apartments and to get the units let they are offering huge discounts and various incentives,” the group said.
Braamfontein has a shortage of student accommodation, which has resulted in “unprecedented demand” for student rentals, Seeff said, adding that 95% of the enquiries it receives are for student accommodation.
The biggest demand is for property priced between R7,000 and R9,000 per month.
Generally bachelor units are priced from R6,000 per month, one bedroom apartments from R7,500 per month and two bedrooms from R8,500.
In Johannesburg South rental demand is high and the range most sought after is between R6,000 and R10,000 per month, Seeff said.