Despite recent contradictory reports, the rental property market is showing signs of growth and buoyancy, according to the latest figures released by Jawitz Properties.
According to Damon Jawitz, sales director of Jawitz Properties, there is still a healthy demand for rentals. “Our records show that during July, there was a record 40% increase in rentals across all sectors; townhouses, apartments, clusters and houses,” he stated.
“However,” he cautioned, “the market is typically price-driven. Priced correctly, there is plenty of scope as there is still an abundance of prospective tenants.”
Jawitz reckons that interest in the rental market has been fuelled by some consumers’ uncertainty in the sustainability of the current market. “They are becoming jittery about how long the low interest-rate will hold. They are nervous to commit to a property in the event of a sudden increase in the bond rate, as we saw in 1994 when the property market crashed,” he said. Jawitz added that renting is a way of sitting it out.
His views chimed with those of Absa’s senior economist, John Loos, who said scorching house prices, especially in key business centres, might be driving people to go the rental route. However, Loos pointed out that, according to his anecdotal evidence, the rental market is cooling off, owing to oversupply in the market.
Another property economist, Erwin Rode, was also non-committal about the exact state of the rental market. “I have no evidence to support the view that the rental property market is growing.”
But Jawitz also agreed that rental prices have cooled significantly compared to this time last year. “Average August rentals in 2003 were R6 800 for a two-bedroom/two-bathroom townhouse in a secure complex. Today the same accommodation would fetch around R5 500 including the complex levy,” pointed out. “A year ago rentals were calculated at about 1% of the purchase price but at present they are running closer to 0,7%.
He said Sandton continues to offer great rental opportunities particularly in areas that are close to the CBD such as Sandown, Morningside and Parkmore. He added that the newer and more remote suburbs of Fourways, Lonehill, Sunninghill and Midrand are undergoing substantial growth as developments mushroom.
“Currently, in the Sandton area there are more than 400 apartment developments coming on stream, in which investors are showing interest. By and large a prospective tenant, who will no doubt commit to a one- to two-year lease at the right price, has a wide range of accommodation from which to choose.”
Posted: 2004/08/17 Tue 15:00 | © Moneyweb 1997-2004 |
