Rentals are coming under pressure in the KwaZulu-Natal mid-South Coast area, from Isipingo to Port Edward, with increased interest in lower-priced rental property now evident and sectional title homes proving more popular than freestanding houses.
When comparing figures for the first half of 2018 to the first half of 2017/2016, for the worst month, 2016 and 2017 are almost on par with 2018 showing a slight decrease, says Jo Giraudeau, residential and commercial property rental manager for Seeff mid-South Coast (Scottburgh and Pennington) and Seeff Amanzimtoti and Hibiscus Coast (Hibberdene and St Michaels). However, when looking at the best month, 2016 and 2017 are about equal but, she says their best month this year is around 25% higher.
"When we examine the numbers, then total income for the first half of 2017 increased by 1.7% over 2016, while for 2018 it decreased by 1.85% compared to 2017, so these are very slight variations,” she says.
Giraudeau describes other changes that have been noted in the rental market. “The first change we are noticing is that in some months we have more stock than we have enquiries, whereas before we could not keep up with the amount of enquiries. Also, the type of accommodation being sought seems to have changed to more freestanding houses than sectional title as families are taking on other members to contribute to rental costs.”
Giraudeau says the second noticeable change is, where in the past owners could afford the initial procurement and monthly management fees, now due to the economy many landlords are opting for unmanaged leases where there is a once-off fee and no monthly management costs.
Also, average demand for rentals is in the R3 500 to R8 500 per month bracket, whereas last year the demand was in the R5 500 to R10 500 per month band, she says.
With rental rates in the area under some pressure, Giraudeau says agents will have to adapt to the new market conditions. Rental agents are going to need to be flexible with the commissions charged, and adjust them according to market affordability, she says.
Agents must also ensure they provide owners with market-related assessments and do not overprice the rentals, which would give false hope to owners as to what their profit could be, adds Giraudeau.
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