Middle-income households who rent are beginning to show economic stress, Andrew Schaefer, managing director of national property managers Trafalgar, said on Thursday.
”Our offices throughout SA report that vacancies in flats renting at R4 000 to R7 000 per month are rising, a typical occurrence in the late downward phase of the economic cycle,” he said.
This was a sign of reduced disposable incomes and a deterioration in confidence in future income growth.
”What happens is young, first-time tenants either don’t move from their parents into their own accommodation or decide to move back home; sitting tenants downgrade to lower rentals at the end of their leases; couples who were considering splitting up decide they can’t afford to, and tenants in two flats arrange to double up in one and save money,” he said.
Vacancies in the Durban area had risen dramatically to 10,2% and in Port Elizabeth, vacancies stood at 12,1%.
”Vacancies could rise to 15% to 20% in the next few months,” Schaefer added.
However, the turn around in about 18 months time would be equally dramatic when confidence returned.
”More than the usual amount of kids leave home, couples separate and doubling up reverses to add to the normal take-up rate of rental
property.”
He said lower rent urban properties were not affected.
”People move into them from outlying areas in the good times or from higher rent properties in a downward phase, maintaining constant demand.” – Sapa