Properties to rent needed
Category Residential Property News
A critical shortage of rental property has developed in Durban according to Wakefields Real Estate letting agents and if this continues it is only a matter of time before rental prices start to rise.
Early in the year FNB in its property barometer looking at the national picture stated that there were signs that certain rental market fundamentals were improving one of these being low investor activity in the buy-to-let market. This it said laid the foundation for a future shortage in supply that would lead to stronger rental inflation.
In general rentals are increasing between 5% and 10% depending on the area, but as soon as landlords expect too much the property remains untenanted.
Rental demand not only outstrips demand in the affordable sector but also in the middle to top sector. There are shortages of stock at Cotswold Downs Golf Estate in Hillcrest where rentals vary from R11 000 to R25 000 a month; at the Pearls of Umhlanga wheredemand is from corporate clients willing to pay R14 000 to R30 000 a month; at Mt Edgecombe where townhouse rentals are around R12 000 and at Le Domaine units are snapped up at rentals of around R7 000 a month.
In the Upper Highway where there are definite signs of rentals rising recent figures show properties letting from around R3000 a month for a bachelor cottage to R7000 for townhouse units and up to R14 000 for top end houses.
Demand has ensured that rental prices in Gateway have bucked the trend increasing by a steady 8% to 10% a year for the past three years. Gateway and Durban North report that decent properties are rented within a couple of days.
In Durban North where cottages and townhouses are very popular rentals vary from R4000/R4500 a month for a one bedroom cottage to R8500 a month for a townhouse excluding light and water. Houses rent from R10 000 a month.
Westville has seen rental prices for three bedroom two bathroom double garage house rise from around R6000 a moth a year ago to around R7000 to R8000 a month. Units in townhouse complexes (which are few and far between in the suburb) let from R10 000 a month and upwards. One bedroom granny flats and cottages let from R3500 a month.
There seem to be many factors at play at the moment but affordability is a big driver of the rental market. Despite the interest rate being at an all time low, property prices and financial restraints - from requiring a deposit to credit issues- have made it difficult for many people to own a home, although they may be able to afford a higher rental.
If the rental property is well kept and properly priced landlords should have no vacancies, which is ideal situation for the real investor who is looking for rental returns.
Rental waiting lists are developing across the board so if you have a property to let give your nearest Wakefields Real Estate branch a call.
29 May 2012
Author: Wakefields
