Rents are high, and city’s rents are rising faster than elsewhere in the world
LOW CONFIDENCE levels and shortage of money are seeing increased demand for rental properties across the country, despite statistics showing that the average national rent is at its highest yet.
And in Cape Town, the rate of rental increases is the highest in the world.
The PayProp Rental Index, which outlines residential rental trends on a quarterly basis, reported in the past quarter that the weighted average national rent had exceeded R7 000 for the first time. It also said the Western Cape was the most expensive province in which to live.
The country’s gross domes- Johette Smuts, and that means the average person “is just getting poorer”.
“It doesn’t help that our unemployment rate is at its highest in 12 years. The truth is, living standards can’t improve without economic growth.”
The weighted national rental average for the second quarter of this year was R7 080.
“The Western Cape is the only province with a slight upward trend over the past four quarters. Once again it is the most expensive province to live in as it attracts the highest rents.
“This province is seeing a ‘semigratory’ influx of people from other provinces, especially Gauteng, which has increased demand.”
But Smuts says a downward trend has been tracked in the Eastern Cape, Free State and KwaZulu-Natal.
Globally, prime residential rents are struggling to achieve growth, with the Knight Frank Prime Global Rental Index, which tracks luxury residential rents across 17 cities, recording annual growth of 0.5% in the year to March 2017.
The number of cities where prime rents have increased annually rose from six in the first quarter of last year to 12 in the first quarter of this year.
“Yet the general trend has been for steady, rather than spectacular growth.
“Cape Town leads the rankings with rents rising by 5.9% in the year to the end of the first quarter of 2017. Growth has been underpinned by strong migration into Cape Town with potential buyers choosing to rent before committing to purchasing.”
The report says prime rents in Nairobi fell by 6.2% in the year to March, and budget cuts by international firms hampered expat demand for prime rental properties.
In London, prime rents continue to bottom out, with the annual rate of falls slowing to -4.9% to March 2017.
“Uncertainty in the sales market following a series of tax hikes has led to an increased supply of rental properties. However, this trend is starting to ease.”
In some of the top financial centres, there has been divergence in the performance of prime rents, the report found.
“Annual rental values fell in New York (1.2%) and Singapore (2.3%), whereas Zurich and Hong Kong recorded a rise year-on-year of 5.1% and 0.6% respectively over the year to March 2017.
“Global economic sentiment remains cautiously upbeat.
“The latest indicators show low unemployment in the US, positive economic growth in every European country, and the growth rate in Asia remains robust. This may spur additional business investment, increased relocation budgets and ultimately an increase in demand for rental accommodation around the world.”