CAPE TOWN - FNB Property Barometer has released its latest findings on the rental escalation on the Atlantic Seaboard which is expected to rise to R200 000 per month.
Taking into account that Zimbali, situated along KwaZulu-Natal's Dolphin Coast has soared to R100 000 per month while the Atlantic Seaboard mounts at around R170 000 per month.
Given the depressed economic climate, the Atlantic Seaboard and City Bowl succeeds in once again being the strongest property markets in the country, according to the latest FNB Property Barometer.
Noteworthy, it surpasses Gauteng as well as inflation by a certain margin.
File image: IOL
According to the barometer, at the second quarter of 2017, the Atlantic Seaboard average house price inflation rate stands at a phenomenal 29.9% year-on-year and the City Bowl at 21.1%.
Chairman of Seeff Property Group, Samuel Seeff, says that it is undeniable that given the sales sector, the rentals sector of the Cape metro yet remains the strongest performer in the country.
Recent reports from TPN Credit Bureau have likewise pointed to the Cape as possessing the strongest rentals market which comprise of generally good paying tenants. This despite up to 20% premium according to area, which Cape property demands.
The sustainability of these premiums are however questionable.
Dinis Martins, COO for Seeff Atlantic Seaboard and City Bowl says that top end rates will most likely come with increasing pressure.
The Atlantic Seaboard is home to the country’s most expensive rental markets, both for long and short term with the highest average rates paid here.
It boasts a sublime location, beaches and facilities combined with the limited property stock which is part of the attraction.
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According to Karyn Farrell, Rental Admin Manager for Seeff Atlantic Seaboard and City Bowl, the top suburbs in terms of commanding the highest monthly rentals are: Clifton, Bantry Bay, Fresnaye, V&A Waterfront and Camps Bay respectively.
The highest rentals within these suburbs range from R80 000 per month at the Waterfront, R170 000 per month in Bantry Bay/Fresnaye and R150 000 per month in Clifton.
Although the most popular rental range is between R25 000-R40 000 per month, rentals in Mouille Point can now reach R100 000 per month and above.
At the V&A Waterfront, a palatial penthouse of 504sqm can be rented for R170 000 per month.
Current escalation rates stand at around 8% on average While landlords are achieving yields/ROI of around 4% on average, current escalation rates stand at 8%- according to property and location.
'The more expensive the property, the lower the rate tends to be simply because top end rates are under pressure'.