Clifton’s rentals in demand – offering princely returns

THERE is a dire shortage of long-term rental stock in Clifton with renters willing to pay up to R250 000 a month to live in this prime coastal spot.

While property in the area, nestled on the Atlantic Seaboard, continues to command some of the highest prices in South Africa, the rental sector is also in high demand, say estate agentsTanya Joubert and Barak Tomlin of Lew Geffen Sotheby’s International Realty.

Unlike some suburbs in the country where the upper end of the rental market has noticeably slowed, there has been no simultaneous slump in Clifton.

“In fact, demand continues to grow across the board and rental rates are continually increasing, with 2017 promising to be yet another good year for property investors in this sector,” says Tomlin.

The strong short- and medium- term markets continue to yield high returns year- round, with premium homes fetching daily rates of up to R90 000 for short-term holiday rentals.

“This high return also applies to long-term rentals, with those seeking the ultimate opulent lifestyle willing to pay up to R250 000 a month for a house or R190 000 a month for a luxury apartment on an annual lease,” says Joubert.

“In summer, apartments in Clifton are fully booked with short-term lets, mainly occupied by upcountry and foreign visitors, and in winter the corporate market is very active with three- to six-month leases being the norm.

“We have also noted an increase in demand for medium-term lets of around six months from Gauteng residents who rent while they look for permanent homes to buy.”

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, says one of the key contributing factors to Clifton’s exclusivity “is limited development land because of its extremely challenging cliff-side topography between Table Mountain and the Atlan- tic Ocean, with suburbs on either side”.

He says there is a growing gap in the sales market between supply and demand as owners have become increasingly reluctant to dispose of secure investments that continue to increase in value, especially during uncertain economic times.

“Some 49% of current owners have owned their properties for 11 years or longer and 11% bought their homes between eight and 10 years ago.”

Geffen says during times of economic uncertainty many investors are drawn to the historic stability of residential property, and this is especially true of the more resilient luxury segment that tends to be less influenced by general market trends, offering solid returns well above the average house price inflation.

In Clifton this confidence is corroborated by New World Wealth’s ranking of Clifton as one of the most expensive residential areas in South Africa.