{"id":767165,"date":"2024-04-09T16:00:25","date_gmt":"2024-04-09T14:00:25","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=767165"},"modified":"2024-04-09T16:00:32","modified_gmt":"2024-04-09T14:00:32","slug":"good-news-for-landlords-in-south-africa-but-with-a-catch","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/767165\/good-news-for-landlords-in-south-africa-but-with-a-catch\/","title":{"rendered":"Good news for landlords in South Africa \u2013 but with a catch"},"content":{"rendered":"\n

TPN’s latest data shows that South Africa’s residential rental vacancy rate is close to record lows after 2023, which is great news for landlords\u2014provided they continue implementing reasonable escalations for tenants. <\/p>\n\n\n\n

According to the TPN Residential Vacancy Survey for the fourth quarter of 2023, the national vacancy rate was 6.69%, a further decline from the third quarter at 6.76%.<\/p>\n\n\n\n

The national average vacancy rate for 2023 was 6.73%, an impressive 11.69% down from 2022.<\/p>\n\n\n\n

The report said that, despite a strong demand rating, there has also been a gradual but slow improvement in the TPN supply rating, ending 2023 at 58.99 points, illustrating a positive reaction to the increased demand. <\/p>\n\n\n\n

The data continues to paint a positive outlook for the immediate future, where residential units remain occupied.<\/p>\n\n\n\n

However, the report warned that landlords must be mindful of the prevailing economic conditions. <\/p>\n\n\n\n

One of the main reasons for the strong performance of the residential rental market in South Africa was the higher interest rates and low consumer confidence. <\/p>\n\n\n\n

These factors have discouraged many South Africans from buying a home and, instead, shifted their focus towards renting residential properties that are considered more secure and predictable. <\/p>\n\n\n\n

“These interest rate hikes have put increased financial pressure on consumers and encouraged a more frugal approach to household expenditure, including strictly managing accommodation costs,” said the report. <\/p>\n\n\n\n

TPN suggests that the current constrained economy requires property investors and practitioners to carefully navigate stressed consumers by implementing reasonable escalations, ensuring good payment behaviour, and keeping their premises occupied.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Western Cape on top <\/strong><\/p>\n\n\n\n

The report highlighted that sluggish economic growth, high unemployment, and strained municipal service delivery have made many South Africans extremely sensitive to location risk.<\/p>\n\n\n\n

When considering where to live, consumers are prioritising safe and well-serviced locations to exploit the limited opportunities available.<\/p>\n\n\n\n

This sentiment around service delivery has booted the demand for rentals in well-run municipalities such as the Western Cape, while the inverse hit provinces such as Kwa-Zulu Natal (KZN). <\/p>\n\n\n\n

The Western Cape maintains the lowest vacancy rate in the country, with only 3.18% of residential stock vacant at the end of 2023.<\/p>\n\n\n\n

As a prime holiday destination for local and international tourists, the Western Cape enjoys lower vacancies during the festive season, driving lower vacancies into the first quarter of the new year.<\/p>\n\n\n\n

In contrast to the positive performance that the Western Cape – even the Eastern Cape – experienced at the end of 2023, KwaZulu-Natal saw an increase in vacancies in the last quarter of 2023, breaking the 10% mark after a confident performance in the third quarter of 2023. <\/p>\n\n\n\n

The report noted that the province continues to be challenged by extreme weather and poorly maintained infrastructure, especially inland. <\/p>\n\n\n\n

However, closed beaches have not provided a substantial influx of tourists to take up shorter-term holiday rentals.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

The many challenges currently facing consumers, including the increased cost of living, have benefited the residential property investor and the various industries that support the overall residential rental market ecosystem. <\/p>\n\n\n\n

“Persistently high interest rates and the increased cost of living augers well for the residential rental market, as consumers remain wary of buying property,” said TPN. <\/p>\n\n\n\n

Rentals continue to grow, and tenants are committed to paying their rent.<\/p>\n\n\n\n

However, it added landlords would need to manage rental increases carefully as they balance tenant affordability with supply and demand.<\/p>\n\n\n\n

\n\n\n\n

Read: Major new \u2018city\u2019 coming to South Africa\u2019s wealthiest area<\/a><\/strong><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

New data reveals a promising outlook for landlords in South Africa, but caution is advised.<\/p>\n","protected":false},"author":92,"featured_media":669973,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[853,11731],"class_list":["post-767165","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-south-africa","tag-tpn"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/767165","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=767165"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/767165\/revisions"}],"predecessor-version":[{"id":767285,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/767165\/revisions\/767285"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/669973"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=767165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=767165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=767165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}