Wednesday, June 20

Petrol price increase likely to affect rentals market

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Reports that fuel prices are expected to rise even higher, largely due to the sharp rise in crude oil price, will definitely have an effect on the property market.

Reports that fuel prices are expected to rise even higher in October, largely due to the sharp rise in crude oil price, will definitely have an effect on the property market.

Sources are saying the department of energy has published information that the price of petrol in Gauteng might increase by 26c a litre in the first week of October, and the price of diesel by 37c a litre.

Consumers who are already under financial pressure due to high food costs, transport cost increases, stricter banking lending criteria and other macroeconomic factors, will come under increased pressure.

The rental market might experience it directly as it is usually more prone to react to economic fluctuations. The difference usually comes in when people who rent are able to make changes to their financial situation by scaling down their home choices. A homeowner’s situation cannot be changed as quickly.

The greater effect on the rental market in the past has beenthe demand for rental properties close to business districts, schools and amenities, to curb climbing transport costs.

The residential sales market is not usually susceptible to short-term changes like fuel price increases. However, there are buyers considering whether or not to buy now who might be more hesitant to make a financial commitment.

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