The national rental vacancy rate as at the third quarter of 2019 was 9.42%, according to the latest TPN Vacancy Survey.
This is the highest vacancy rate since the inception of the survey at the start of 2016. Landlords were already under pressure before the lockdown, when resultant tenant financial struggles came into effect.
Stats SA reports that 32435 residential dwellings were completed from January to August last year, with many of these newly developed properties finding their way into rental stock, increasing the supply of property and contributing to higher vacancies, says TPN’s Michelle Dickens.
Tenants are influenced by attractive new finishes, and benefits such as new appliances, which some developers include. Landlords of more established properties are increasing maintenance spend, upgrading common property and internal units to compete for tenant interest.
“Many of the larger landlords have also responded to increasing vacancies with offers to attract new tenants. Bargain-hunting tenants are able to find offers such as their first month rent-free and free wi-fi and data.”
Rental market strength declined in all large provinces other than Eastern Cape, which recorded its second consecutive quarter of improvement, the survey shows. The Western Cape recorded the weakest market for the second consecutive quarter, with supply of rental properties continuing to climb “to its highest recorded level”.
KZN is still enjoying a landlord-positive market with demand outperforming supply. Properties with rents of less than R3000 were most in demand.
◆National average rental is R7 844.
◆National average damage deposit is 1.27 month’s rent – R9 962.
◆Around one-third of tenants pay R5 000 to R7 500 a month; 20% pay R2 500 to R5 000 monthly and a further 20% pay R7 500 to R10 000 a month.
◆National average tenant household disposable income is R33 297 per month.
◆Average tenant pays 44.9% of income towards debt repayments and 29.9% to rent. Thus, only 26.2% of income is left for other expenses. This varies by province – in Gauteng, tenants have 21% of income left, in Western Cape 31.8% and in KwaZulu-Natal 29.4%.
◆Currently about 25.6% of tenants are in the “highrisk” bracket, according to their credit score.