Rental market boom is a boost for rental investments

Rentals are booming as many opt to rent in this economic climate, say many of Seeff’s rental agents. Rental rates have reached some of the highest levels in years. PayProp for example reported earlier this year that their data showed that rental rates had grown at the best year-on-year levels since 2017.

READ: Repo Rate remains stable at 8.25%, bringing a sense of relief to homeowners

According to the Seeff Property Group demand in some areas has pushed rates to a level where rental property investors are seeing returns of anywhere between 9% in Century City in Cape Town and 19.5% in the Melrose and Illovo areas in Joburg North/Sandton.

These returns are significantly higher than inflation and potentially among the highest seen in recent years.

A stream of semigration has boosted Cape Town’s high-end rentals

Sonya Garisch and Jaqui Bush, rental agents with Seeff Constantia have achieved rentals of up to R120,000 per month in Constantia. They say there has been higher tenant demand for luxury rentals this year with a combination of corporate and private tenants, both local and international, driving the demand.

The stream of people relocating to the Cape is higher than ever before according to the agents, citing Cape Town’s growing desirability with people not only heading here from upcountry areas, but also international relocations. Landlords have been commanding, and achieving, higher rentals than in the past due to the high tenant demand.

Ross Levin, licensee for Seeff Atlantic Seaboard and City Bowl says Cape Town’s premier markets are back to the pre-Pandemic levels with residential and holiday tenants streaming in. There is now a shortage of stock and Levin expects the market to get even busier with the bumper tourist season expected. Semigration will boost further demand heading into 2024.

READ: Exploring the homeownership

The original article can be found here

Scroll to Top