[imagesource: Freepik]
Job losses, reduced salaries, and rising expenses during the lockdown period have impacted the rental market in South Africa significantly over the past couple of months.
According to TPN Rental Data for Q3, the number of vacancies countrywide are on the rise, especially at the lower end of the market, with 17% of properties recorded as vacant, as well as the other end of the spectrum, with luxury property markets down by 23%.
The mid-level affordable market seems to have remained steady as people downgrade to accommodate a shift in financial security.
The Western Cape has retained their position quarterly as the best-performing rent collection province, with 80% of tenants in good standing during the lockdown.
That just about covers the struggles of landlords at the moment, so let’s move on to renters, whose choice of property relies heavily on what they can afford.
The cost of living in South Africa varies from province to province, and from city to city.
Online job aggregator Adzuna looked into the average salary versus the average rent across the country, as of August 2020.
After comparing average rental prices and wages of more than 100 000 online job listings, they were able to pinpoint the most cost-effective areas for South Africans to live and work.
Again, we should point out that Adzuna’s ‘average salary’ findings are clearly not representative of the average South African’s salary, but is based on jobs listed online across various sites.
Property24 neatly collated their findings into the table below, which represents our 10 major cities:
No surprise to see Cape Town atop that list, really.
I reckon we’d also come out tops in highest percentage of salary spent on organic veggies and artisanal bread.
You can check out some of the stats for the second quarter, here, if you’re keen to do a comparison.
According to Adzuna, “the most affordable cities to rent in came out as Bloemfontein, Polokwane, Rustenburg, Nelspruit, and Pretoria”.
“With more and more remote jobs in South Africa, where you stay is less and less connected to where you work. Even though salaries in Cape Town are higher, renters in the Western Cape fork out as much as 27% of their wages on rent every month.”
Once again, it’s a ‘top spot’ that we’re not so keen on claiming, and one that has remained unchanged since May 2019.
This could change, though, as landlords fight to attract tenants.
Market strength drives vacancies, and as the TPN Market Strength Index confirms demand is drying up coupled with plenty supply on offer. For those tenants with an income, it is a tenants market.
Landlords should brace themselves for price negotiation and competing tenant incentive take-on benefits like zero deposit, first month rent free, new appliances and free WIFI.
So, if you’re thinking of moving, or want to upgrade to a larger property, keep an eye on the listings.
[source:adzuna&property24]
